Fondul Proprietatea challenges pay rise for employees of Bucharest’s two airports

Newsroom 27/05/2016 | 15:30

The portfolio manager of Fondul Proprietatea (FP), the closed-end fund worth EUR 2.5 billion, has voted against higher salary increases for the employees of state-controlled Bucharest Airports, a company that manages Bucharest’s two airports. Bucharest Airports’ budget for 2016 was approved this Friday in the company general shareholders’ meeting.

FP owns 20 percent of Bucharest Airports and the remaining 80 percent is owned by the Romanian state through the Ministry of Transports.

“FP has voted against the budget for 2016 at the Bucharest Airports general shareholders’ meeting which took place today (e.n. Friday, May 27), given that it provided for significant salary increases for the company’s employees, without establishing any correlation to concrete performance objectives,” commented Greg Konieczny, executive VP of Franklin Templeton Emerging Markets Group and fund manager of Fondul Proprietatea.

Salaries at Bucharest Airports are already among the highest in a state-owned company and following this hike, the average total remuneration cost per employee, including bonuses, would surge from RON 7,601 (approximately EUR 1,700) in 2015 to RON 9,319 (approximately EUR 2,000) in 2016, meaning a 23 percent increase, he added. “Besides that, the budget also includes an increase in total number of employees from 1,408 in 2015 to 1,516 in 2016, which represents a 43 percent increase from 1,062 employees at the end of 2010. All these changes will lead to a 56 percent decrease of the company’s gross profit, from RON 221.9 million (approximately EUR 50 million) in 2015 to RON 126 million in 2016.”

FP shares are trading on the stock exchanges in Bucharest and London.