Romanian banker bonuses in 2009

“Considering that the crisis has undermined the banking system, bonuses no longer have any purpose. The senior manager compensation system is changing. There will adjustments to the systems for compensating bankers,” said Furnică, President of the Leadership Development Solution company, the partner for Romania of the international executive search leader, Korn/Ferry International.

According to Furnică, bonuses received by bankers in the private sector are not open to discussion, “as long as there is a president of a state-owned bank who earns a monthly €30,000.” He did not specify the name of the person he was referring to, but the two state-owned lenders are CEC and Eximbank.

As of this summer, Romanian bankers were forced by the National Bank of Romania to forego employment contracts and sign only mandate contracts with the shareholders of credit institutions. Among the main differences between the two types of contracts are the way in which severance packages are calculated, and the period of the mandate.

“These contracts [Ed. n. - mandate contracts] are special agreements, which offer bankers more freedom, higher revenues, but also involve greater risks, as these can be cancelled if the shareholders are not satisfied with [the banker’s] performance,” official sources in the banking sector said.

Some in the system say that there are two or three bank chairmen in Romania who may earn between €700,000 and €1 million annually. “There is a rather high level of bonuses, and the indicators that must be reached are ones imposed by the bank in Romania and the mother-bank,” these same sources added.