Nfter the scandal surrounding the lavish salaries for the managerial staff of Rundfunk Berlin Brandenburg (RBB), calls for more transparency in the management remuneration of public companies have become louder. In fact, the majority of public companies do not yet disclose the salaries of their managerial staff on an individual basis. Just under 22 percent of municipal companies publish the salaries of their managing directors; in the case of public companies at federal or state level, the figure is almost 44 percent. This is the result of a study by the Zeppelin University in Friedrichshafen on the management remuneration of public companies.
However, some patterns can be discerned from published salary data from more than 1,100 public companies. According to the study, around 3.8 percent of managing directors earn more than 500,000 euros a year, 17 percent earn more than 300,000 euros, 40.7 percent are between 150,000 and 300,000 euros, and 42.3 percent earn less than 150,000 euros a year. Basically, the larger the company, the higher the salary of the managing directors.
There are significant differences between the sectors: the top earners among the managers of municipal companies are – unsurprisingly – the managing directors of the savings banks. According to the study, they receive an average of EUR 373,000 per capita per year, although this income also depends on the size of the savings banks: According to the study, managing directors of large institutes with at least 670 employees receive an average of EUR 466,000, while smaller savings banks with fewer than 375 employees receive it the managing directors on average 314,000 euros. The managing directors of the state banks earn more than the heads of the savings banks: the managing directors of banks and financial institutions in the federal states and the federal government receive around 500,000 euros a year.
At the municipal level, the heads of public hospitals (EUR 236,000) and the managing directors of municipal utilities (EUR 234,000) also earn well, while the managing directors of business development and city marketing (EUR 138,000) or cultural institutions (EUR 131,000) earn significantly less on average municipal theatres, operas and museums.
The research team led by the Friedrichshafen economist Ulf Papenfuss evaluated the remuneration data from 1140 companies for the currently available 2020 financial year for the study. Public companies from the federal government, states, counties and cities with more than 30,000 inhabitants were included. The study, which was presented for the first time, is to be repeated annually in the future.
The researchers hope that in the future, many more public companies will publish the salaries of their top managers. The often encountered secrecy about salaries is “no longer up to date”, says Ulf Papenfuss: “Public companies are lagging behind listed private companies in terms of remuneration transparency. In a democracy, this is a situation that should not be accepted.” He calls for transparency laws in all federal states and public corporate governance codes for all cities, municipalities and districts: “In view of the findings, it is sufficient to achieve the goals formulated by politicians not stop hoping for voluntary disclosure.”
