Eight state-owned companies are certain to pay the highest allowed salary to their leaders, according to 24.hu’s collection of data.
Among the largest employers, both the CEO of the Hungarian Post and railway provider MÁV, employing 23,000 and 17,000 people, respectively, take home a gross monthly salary of HUF 5 million. The top managers in question are Barnabás Balczó, a former colleague of Minister of Construction and Transport János Lázár, and Zoltán Pafféri. A base salary of five million is also given to Zsuzsa Lakner at the helm of Hungarian National Asset Management Inc., to Hungarian Development Bank CEO Levente Sipos-Toma, to energy giant MVM’s head Károly Mátrai, as well as to national lottery leader and former minister without portfolio Andrea Mager (who is also a member of the board of directors of the 30% state-owned Magyar Bankholding Plc.).
Thick skin, thick pay checks
Another former minister, László Palkovics, also earns five million forints as the CEO of N7 Holding National Defence Industry Innovation Ltd. A year ago, we reported of the politician leaving the helm of the Ministry of Innovation and Technology in November, noting that he hadn’t exactly pulled a short straw with the resignation. However, back then it seemed that while he would complement his five-million-a-month defence assignment with the management of Automotive Test Track Zala Ltd., overseeing a test track in Zala County built from 52 billion forints, he would not receive compensation for that position. However,
Consequentially, he has undoubtedly become the highest-paid state manager, even though it is unknown how much he receives for the position of chairman of the board of trustees of the foundation that operates Győr’s Széchenyi István University; as the relevant link on the institution’s website does not lead anywhere (we previously reported that board members receive 1.5 million forints per month). The asset management holding created alongside the foundation is also headed by Palkovics (our newspaper recently reported on the real estate affairs of the company group around the university), and he is also the chairman of the supervisory board of Rába Automotive Holding Plc. for a salary of approximately 700,000 forints (based on available data, from 2022).
It’s therefore impossible to give an exact amount, but the former minister can roughly earn a gross monthly salary of ten million forints through state and state-affiliated companies. His final ministerial asset declaration also included a research professorship amounting up to a monthly sum of 900,000 forints.
The lucrativeness of the defence industry is evidenced not only by Palkovics but also by László Trembeczki, earning at least 7.8 million forints per month as the CEO of no less than four companies under the Ministry of Defence:
- HM Electronics, Logistics, and Asset Management (HMEI) Plc. earning him 4 million,
- HM Arzenál Electromechanical Plc., where he is entitled to 2 million HUF each month, while
- HM ArmCom Communication Technology Plc. and
- HM Currus Gödöllő Combat Vehicle Technology Plc. both provide him with an additional 600,000 HUF each.
In addition, he receives 600,000 forints per month also as a board member of HMEI Plc.
While sports undoubtedly constitute a prominent sector in Hungary, the National Sports Agency may seem a bit out of place next to these strategically significant enterprises. However, the Agency’s president and CEO, Péter Bíró, also falls into the five-million salary category. Bíró returned home in the beginning of the year with more than 25 years of managerial experience, which is likely to be the justification of such a generous compensation package, as his predecessor, Péter Berényi, received 2.3 million forints for the same role in 2022.
Close to 5 million forints are also received by the heads of Garantiqa Credit Guarantee Plc. and foreign trade bank Eximbank: the former (on which we reported) earlier in connection with providing guarantees to a fraudulent ‘invoice factory’) is managed by István Attila Szabó for 4.9 million, while Kornél Kisgergely oversees the latter for a monthly fee of 4.8 million forints.
Woods for the trees
The Orbán-government abolished the previous two-million salary cap in 2015 – the cap had initially been determined by legal decree, and later only by customary law. This move allowed leaders in the financial sector to have a monthly base salary of up to five million, those in the energy sector and other strategically important companies to have four million, and leaders in other companies to have a monthly compensation of three million forints. These salary caps have not been changed since, and recent years have seen political leaders’ salaries catch up to these levels. In early 2016, newspaper Népszabadság reported that the monthly CEO salaries of all twenty-two state forestry management companies exceeded two million forints (eight of them even reaching the three-million cap), while Prime Minister Viktor Orbán‘s salary at the time was one and a half million forints.
The first government members to receive a five-million salary were Andrea Bártfai-Mager, responsible for managing state assets, and János Süli, tasked with overseeing the expansion of the Paks nuclear plant (this corresponded to a five-fold salary increase for the two politicians). The others had to settle for 1,782,000 forints. With the formation of the fifth Orbán government, Minister for Economic Development Márton Nagy, and Minister of Culture and Innovation János Csák were awarded the exclusive five-million salary, while the ‘regular’ ministerial salary increased to 2,632,000 forints. Viktor Orbán’s prime ministerial salary increased to 4,178,000 forints this year after the government majority voted to link his previous one and a half million compensation to the Speaker’s honorarium following the 2022 election victory. As he is also entitled to the base MP salary as well, he currently receives 5,725,000 forints monthly, surpassing the top executives of state-owned companies. However,
not even with his salary being expected to increase to 6.5 million HUF in March 2024.
A run for their money
Steering back to the leaders of state-owned companies: Volánbusz-CEO Vince Kruchina and Alex Bozóky, the head of National Toll Payment Service Provider Plc., both earn four million forints. Companies under MVM, such as Paks Nuclear Power Plant Plc., energy system controller Mavir, and MVM Mátra Plc., also honour their leaders’ efforts with four million forints each month. Paks II Plc. is no exception, although besides his four-million salary as the firm’s CEO, Gergely Jákli earns an additional 1.4 million as chairman of the board of directors. Based on our previous article, the company had grown rather comfortable with million-forint salaries; not to mention that members of the board and the supervisory committee of the since vanished project company responsible for the Paks expansion received higher compensations than their counterparts at the already functioning nuclear plant.
Zoltán Guller, leading the Digital Hungary Agency, also earns four million forints a month. Much like Palkovics, he is a perfect example of how a state company executive can derive income from multiple sources. While Guller, a former ministerial commissioner and leader of the Hungarian Tourism Agency, no longer receives compensation for his board membership at the latter, he earns 400,000 forints as a member of the supervisory board of national lottery firm Szerencsejáték Plc. and, following the state’s buy-in, he joined Vodafone’s board of directors. However, as for his main task “digital Hungary”, much work seems to be still needed, as his organisation, along with the Tourism Agency, publishes its public interest data in a poorly scanned PDF file.
Albeit from two sources, the state also honours the efforts of Zsófia Jakab with a four-million compensation package. The 34-year-old is known as a friend and former classmate of Viktor Orbán’s daughter Ráhel Orbán. While her salary of 1.5 million at the helm of the Hungarian Fashion & Design Agency would not place her among the best-paid state CEOs, her schedule permits having another full-time job, earning an additional 2.5 million forints as the Deputy CEO for Marketing and Communication at the Hungarian Tourism Agency.
On another note, the Tourism Agency must have a rather unique way of interpreting hierarchy and leadership responsibility, as besides Jakab, two other deputies earn more than CEO Péter Horváth.
The median salary of the leaders of the approximately six dozen state-owned companies we investigated through our public interest data requests was 2,750,000 forints as of July 1st. So, the number of CEOs earning more than this sum equals the number of those who earned less than it, while
However, it should be noted that for most executives, their salary has not increased in the past two years, partly because they are already earning the maximum amount permitted by law. Nevertheless, three-quarters of the companies we examined had CEOs earning the same amount in July 2023 as in January 2022. Nine companies had mid-year salary increases; with the most significant raises taking place at Garantiqa and Transdanubia Regional Waterworks, where the director’s fees increased by 1 million and 1.1 million forints, respectively.
There were also some who managed to grow financially despite inflation eating away 32.4% of their salaries over the past two years: as mentioned, the national sports agency nearly doubled its top executive salary, while the leaders of forestry firm Északerdő and Transdanubia Regional Waterworks also experienced an increase in the real value of their wages.
An inflating issue
As for the average wages, however, we only found two state companies where these surpassed inflation: in the Ipoly and Kisalföld forestry companies, salaries rose by 3.8% and 1.8%, respectively, in real terms. However, for most major state employers, the purchasing power of wages declined across the board: at MÁV (Hungarian State Railways), it fell by 18.6% over two years, at the Post by 17.3%, and at Volán (long-distance bus services) by 17.2%. While many companies tried to mitigate the effects of inflation (in January 2023, on average, employees of state-owned companies took home HUF 73,464 more than a year earlier, and there was an average increase of HUF 15,776 during the current year), the inflation-adjusted value is well in the negative territory, at -16.7%.
However, at nine companies, there is hardly a reason to complain, as the average wages exceed a million forints by now.
MVM Energetics’ employees top the list, receiving an average of HUF 1,590,575 each month. The average salary exceeds the one-million threshold at
- the newly established Hungarian Wine Marketing Agency (HUF 1,266,667),
- the Hungarian Debt Management Centre (HUF 1,169,123),
- Hungaroring Plc. (HUF 1,164,179),
- the National Event Organizer Agency Non-profit Plc. (HUF 1,151,304),
- Eximbank (HUF 1,120,624),
- the Hungarian Development Bank (HUF 1,087,235),
- the Regional Development Holding (HUF 1,042,000),
- and Mavir (HUF 1,003,567).
The 1-million group is followed closely by Garantiqa Credit Guarantee Plc. (HUF 993,421), Zoltán Guller’s Digital Hungary Agency (HUF 987,451), Hiventures Venture Capital Fund Management Ltd. (HUF 982,634), as well as MVM Next Energy Trading Ltd. (HUF 976,927) and National Waterworks Ltd. (HUF 959,132). The latter emphasized in its response to our inquiry that their firm mostly employs highly qualified, experienced professionals and does not employ anyone in manual labour positions.
Among the companies offering the lowest average incomes, we find some of the largest employers:
- the Hungarian Postal Service (HUF 386,543),
- long-distance bus company Volán (HUF 390,689),
- the state railway provider, MÁV (HUF 429,952),
- as well as several forestry management companies.
In the majority of forestry firms, the earners of the lowest base salaries receive minimum wage; in our collection, this constitutes the lower end of the income range at HUF 232,000 (the minimum wage sits at this amount until this year’s December) for nineteen of the examined companies. Eleven other corporations pay less than HUF 300,000 to their lowest-earning employees, including the Postal Service (HUF 277,000), Volán (HUF 241,512), and MÁV (HUF 253,000).
In contrast, the lowest base salary exceeds half a million at six state companies. At Hungaroring Plc., this amount is exactly 500,000, at the Regional Development Holding it is 566,000, at the National Waterworks it is 600,000, at MVM Energetics it is 601,000, at the State Debt Management Centre it is 640,000, while
The average difference between the lowest and highest salaries was HUF 2,629,000, meaning that those at the top of the pay scale typically earn nine times as much as those at the bottom.
The most unequal wage structures are found at the companies with the most employees: at the Postal Service, the CEO earned nearly thirteen times as much, at MÁV more than eleven times, and at Volán ten times as much as the average employee.
