The much anticipated annual “salary issue” of Icelandic business magazine Free Trade, Frjáls Verslun (Iceland Review sister publication) hits news stands today. The “salary issue” lists 2400 Icelanders and their respective monthly salaries.
After filing tax returns during the first half of the year, the taxes levied on each taxpayer are made public the first two weeks of August. During that period, the list of levies can be accessed by all citizens at the office of the tax collector. The reason behind making the list of levies public dates back to 1921. The purpose was to allow people to monitor each others taxes and benchmark their own, and also to ensure the right to appeal the amounts both they and others were being charged. (MP Sigurdur Kári Kristjánsson details this in a article in Morgunbladid, July 30) .
Icelandic State Radio, RÚV, points out that salaries in the financial sector and those working in international businesses has increased the most. At the same time salaries in the fishing industry, historically among the highest salaries in Iceland are decreasing. (See, IR, Daily News June 22, “Higher per capita income from the financial sector than the fishing industry”).
RÚV also reports that salaries of CEOs and managing directors are increasing year-over-year. The list below shows the salaries per month of several well-known business executives.
Vilhelm Robert Wessman, CEO Atavis Group, ISK 20,396,000 per month
Jón Ásgeir Jóhannesson, CEO Baugur , ISK 9,102,000
Hreiðar Már Sigurdsson, CEO KB Bank, ISK 7,505,000
Sigurður Einarsson, Chairman KB Bank, ISK 5,783,000
Bjarni Ármannsson, CEO Íslandsbanki ISK 5,323,000
Jón Scheving Thorsteinsson, CEO BG Capital London, ISK 4,723,000
Kári Stefánsson, CEO deCODE genetics, ISK 3,261,000
Sigurjón Þ. Árnason, General managing director Landsbanki, ISK 2,659,000
Halldór J. Kristjánsson, General managing director Landsbanki, ISK 2,382,000
Jón Sigurðsson, CEO Ossur, ISK 2,274,000
Brynjólfur Bjarnason, CEO Iceland Teleco, Landsíminn, ISK 2,113,000
Rannveig Rist, CEO Alcan Iceland, ISK 2,095,000
Jón Helgi Guðmundsson, CEO Norvík, ISK 1,565,000
Kristín Jóhannesdóttir, CEO Gaumur, ISK 1,368,000
Fridrik Jóhannsson, CEO Burdarás, ISK 1,360,000
Jón Karl Ólafsson, CEO Icelandair, ISK 1,266,000
Ragnhildur Geirsdóttir, CEO FL Group, ISK 1,089,000
Hafþór Hafsteinsson, CEO Avion Group, ISK 1,047,000
Almar Örn Hilmarsson, CEO Sterling, ISK 561,000
Björgólfur Guðmundsson, chairman Landsbanki, ISK 444,000
Lýdur Guðmundsson, CEO Bakkavör Group, ISK 314,000
Ágúst Guðmundsson, chairman Bakkavör Group, ISK 306,000
Björgólfur Thor Björgólfsson, chairman Burdarás, Actavis, ISK 287,000
RÚV, points out that Björgólfur Thor Björgólfsson, chairman of Burdaras and Iceland’s first dollar billionaire, earns ISK 287.000 per month, about ISK 6000 more than Katrín Jakobsdóttir, the vice chariman of the Left – Green party.
The salaries of the president, ministers and MPs start at ISK 384,000 and go up to ISK 1,465,000. The president of Iceland, Ólafur Ragnar Grímsson, earns ISK 1,465,000 per month while the prime minister, Halldór Ásgrímsson, earns 935,000.
The top earner in the medical field is Júlíus Valsson with ISK 2,047,000 per month. Interestingly, four out of the five highest paid medical doctors work in the countryside – two in Selfoss, one in Akranes and one in remote Neskaupstadur. A few years ago doctors working for deCODE genetics were among the top earners, but now those doctors working in the country side and those employed at the University Hospital, Landspítali top the list.
The highest paid lawyer on the list is Sigurður G. Guðjónsson, publisher of the new Icelandic daily Bladid with ISK 2,240,000.
Neither artists nor athletes are prominent in the top spots. Sigurpáll Geir Sveinsson, professional golfer earns ISK 400,000 while Finnur Kolbeinsson, soccer player for Fylkir earns ISK 398,000. Invar E. Sigurdsson, one of the countries most well known actors earns ISK 267,000. Writers are noticeably among the lowest paid, with Thor Vilhjálmsson, one of Iceland’s most renowned writers earning ISK 125,000 and Andri Snær Magnasson author of award-winning children’s novel The Blue Planet earning ISK 200,000.
In an article written last December Jóhanna Sigurdardóttir, MP for the Social Democratic Alliance party, points out that for the 2003 tax year 1% of the wealthiest paid the lowest taxes. These 500 declared 88% of their wages as financial income and taxed as such. Tax on financial income (capital gains, dividend and interest income) is 10% while income tax is 25-27%. Moreover, financial income is not taxed at the municipal level whereas ordinary salaries are assessed a tax of an average 12%.
This means that the effective tax rate of people earning primarily financial income is considerably lower than that of those earning regular salaries.