CAIRO: In a move to restructure the administrative and financial framework of the Egyptian Stock Exchange, the bourse chairman has cut salaries of senior executives by roughly 20 to 40 percent, while cutting managers and directors’ salaries by about 15 to 25 percent.
Mohamed Omran, head of the exchange, told Daily News Egypt on Tuesday that the market has made its decision to keep up with the recent socio-economic unrest that has battered the country’s economy.
“I have indeed taken the decision to cut salaries of higher executives because the stock market has been affected by what is happening in the Egyptian economy, after all we are a part of the country’s market,” he said.
“The decision to cut down salaries is an administrative move inside the exchange, it has nothing to do with any other organization, it directly relates to how we are restructuring the institution’s internal framework,” he added.
The move to cut salaries of higher executives is a sweeping decision taking place across the country’s government institutions and public sector companies, according to Alaa Ezz, secretary general of the Federation of Egyptian Chambers.
“There is a decree by the Cabinet where they are working on a minimum and maximum wage for government employees in order to readjust to the recent developments in the country’s economy. The International Modernization Center (IMC) and the exchange have already done this, for example,” he said.
“All government institutions are being affected, except for the Central Bank of Egypt… and of course, private international banks,” he added.
Ezz told DNE that discussions between Cabinet members are currently underway in order to decide whether or not there will be a ceiling set for public sector wages.
As Egypt’s economy continues to feel the strain of the lack of tourism, foreign direct investments, and dwindling foreign currency reserves, the government has had to make adjustments in the way it spends.
Currently, the proposed minimum wage for public sector employees is LE 700, including bonuses and meal stipends.
While many have argued this is still not enough to keep up with the prices of food and fuel that have been increasing globally, government officials have announced this is the most they can adjust, given the current conditions of the economy.
Instead of laying workers off and increasing the unemployment rate, the government decided to adjust the salaries of “upper” employees.
“The government institutions had to either reduce the number of employees or cut salaries, so they decided to reduce some of the salaries of higher executives,” he pointed out.
“There is talk right now to see if there should be a set figure, maybe it will be 25 times the minimum; officials are looking at other global economies to decide.”
He stressed that while it may not affect some institutions of high caliber like the bourse, for example, it can cost government entities high-skilled workers that have higher “market prices.”
“For some, this is acceptable, some can accept getting low salaries because they need the experience and the caliber of the institution on their CVs, but in some cases you’ll be losing high quality employees and skilled individuals that you can’t replace,” he said.
“There is a reason these employees have these salaries, they speak multiple languages and are highly skilled.”
