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Experts back up Putin’s appeal to top managers to make incomes public

April 17, 2015, 18:39 UTC+3 Alexandrova Lyudmila
Russian President Vladimir Putin

Russian President Vladimir Putin

© Mikhail Metzel/TASS

MOSCOW, April 17. /TASS/. Russian experts believe that President Vladimir Putin’s appeal to top managers of state-controlled companies to make their incomes public will facilitate stabilisation in the society and assure Russians’ better trust in government.

On Thursday during an annual question-and-answer session officially known as "The Direct Line With Vladimir Putin," the Russian head of state drew a bottom line under a two-year dispute on whether top managers of major companies should submit their income declarations.

Putin recommended heads of state-owned companies to follow the example of Western business people and to declare their incomes voluntarily.

"The government has adopted a code of conduct, even in business. It's been accepted, but in practice, it does not work. If you ask my opinion, I would strongly recommend that the heads of companies disclose the incomes. I don't see anything wrong with that," Putin said.

Back in July 2013, Putin signed a decree obliging the government to ensure publications of this information by state-owned companies. In December 2014 the government approved a relevant resolution but three major companies - Rosneft oil giant, RZD Russian Railways and Gazprom - ignored the demand.

At the end of March reports came that the government had allowed top managers of state-controlled companies to stay away from disclosing their incomes. Heads of 23 open corporations alongside members of their families were relieved of these obligations. But heads, their deputies and chief accountants of the companies 100% owned by the state were made to publish their incomes.

"Good that Putin gave such a recommendation but it is not a fact that all will use it," Professor Vladimir Sokolov of the RANEPA state service-and-staff policy department told TASS adding that it should have been prescribed by the law.

"In the countries that pose themselves as civilised, any organisation related in the slightest degree to the government (either possesses state shares or state officials are delegated to it, or receives orders from the government) must be fully open, including in the salary sphere," Prof Sokolov said.

"Moreover, in the United States, and Japan, and some other countries staff members of purely commercial organisations, not related to the government but with spending outlawed by their inside rules are liable for criminal prosecution," he said. "Thus, in Japan several top managers of commercial companies were jailed for using corporate jets for personal purposes or wasting public money on boozing."

"In Russia, actually all major corporations are linked to the government to some degree and in this case incomes must be made public," he said. "People have an unalterable opinion that managers do not get salaries eight times higher than average ones in the company (as the law says) but much higher. For example, at higher educational establishments."

Russian top managers earn far more than their counterparts abroad. According to recent statistics, average incomes of CEOs at major corporations in the West vary from $600,000 to $1mln, while in Russia top around $15mln.

"An impression that a gap in salaries of employers and employees is absurdly enormous creates negative moods in the society and undermines its stability," he said. "People’s trust in the authorities is vanishing and a feeling of acute injustice is emerging, rooted in this situation."

Svetlana Sergeyeva, the RANEPA associate professor in political sciences, says that complete transparency in incomes and spending of state-owned company executives is necessary.

"If it fails to happen, civic society and the state will lack understanding then and this will eventually trigger confrontation in society at large," she said. "Covering-up of the incomes just widen the gap between the state and society."

The more they are transparent, the more opportunities emerge for discussions as Truth is sprout in discussion.

"That’s far better than to cover up the incomes, as people will learn about high earnings from various sources all the same," Sergeyeva concluded.

TASS may not share the opinions of its contributors