Iceland central bank chief in pay dispute

Már Guðmundsson took over as Governor of the Central Bank of Iceland in August 2009 and his salary at the time was negotiated with the bank’s board of directors. It was decided he would get ISK 1.575 million (EUR 9,900) per month; but that figure has since been slashed.

In the same month the law on public sector pay was changed so that directors of public institutions (including the Central Bank) would have their pay set by a central committee and that their basic pay must not be higher than the Prime Minister’s basic pay of ISK 935,000 (EUR 5,880) per month.

Following that decision Már Guðmundsson’s wages were cut, in March 2010. The committee decided his pay would be ISK 862,000 a month, with overtime pay each month making a total of ISK 1.266 million per month — or about ISK 300,000 (EUR 1,885) less than he was originally on.

The central wage committee’s decision from February 2010 makes note of Már Guðmundsson’s on-the-record observation that he carefully examined the job’s pay and conditions before applying and that the wage law changed after he had been taken on.

Már is now calling upon the Central Bank to change his pay back; arguing that his current salary is a breach of his employment contract. The Reykjavík District Court formally accepted his case in December and the deadline for the submission of evidence runs out this month.

Már was unreachable yesterday, as he is overseas and the head of the board of directors refused Vísir.is’s interview request.

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