ECONOMY

Eurobank officials send message by taking cut in salaries

Senior Eurobank officials have heeded Chief Executive Christos Megalou’s proposal to reduce their salaries, aiming to send a strong message of resolve that they are determined to continue in their cost-cutting efforts so as to see the lender return to profit as soon as possible. Officials from the bank will travel to the US today for meetings and presentations ahead of Eurobank’s share capital incease.

According to sources, Megalou’s salary, which constitutes a ceiling for the bank’s pay structure, will drop 17 percent on an annual basis. The salary cuts will affect general directors, members of the bank’s strategic planning and executive committees as well as other officials of the lender and its subsidiaries.

The decisions to cut pay came exclusively from the group’s management and, according to Eurobank sources, the move does not simply reflect a desire to reduce costs but also senior bank officials’ commitment to and confidence in the state-controlled lender’s prospects and future course. The reductions in pay are not in any way connected to the group’s general policy on employee salaries.

The decision has been communicated both to the Hellenic Financial Stability Fund (HFSF), Eurobank’s main shareholder, and the regulating authorities.

The reduction of operation costs has been the bank’s main priority. In the first nine months of the year, Eurobank’s operating costs went down by 7.2 percent on annual basis, which came from a 7 percent drop in operations in Greece and 7.7 percent abroad. Eurobank recently completed a voluntary exit program for 1.073 employees, which will entail an estimated 61-million-euro annual reduction in the group’s operating costs – 14 percent of the group’s operating expenditure in Greece.