Moldovan government proposes targeted measures to stop excessive remuneration practices

The government will step in to eliminate excessive remuneration practices in public entities and to ensure a clearer link between pay, skills and results achieved.

At a request by Prime Minister Vasile Tofan, the cabinet analyzed the level of remuneration at 125 public institutions, authorities and enterprises, totaling 39,796 employees. The data shows that the problem is not widespread, but concentrated in a limited number of entities and positions; however, cases of unjustifiably high salaries and insufficient linkage to performance require firm interventions.

As much as 85.8 per cent of almost 40,000 employees have net salaries below 20,000 lei, of which 55.6 per cent earn under 10,000 lei net, and 30.2 per cent - between 10,000 and 20,000 lei. Almost 8.9 per cent have net remuneration between 20,000 and 30,000 lei, and 4.3 per cent – between 30,000 and 50,000 lei. A total of 439 people, or 1.1 per cent of the total, earn more than 50,000 lei net per month, and 152 of them, representing 0.38 per cent of all employees analyzed, exceed 80,000 lei net. The average net remuneration in the perimeter analyzed is approximately 11,900 lei, and the median – about 9,000 lei.

The differences between types of entities are significant. The four independent regulatory authorities, which account for 2.5 per cent of the total (1,005 employees), have a salary level more than twice as high as the rest of public institutions and four and a half times higher than state-owned enterprises. Of the 439 positions with remuneration above 50,000 lei, 180 are found in independent authorities, 130 – in state-owned enterprises, 51 – in companies with public capital, 47 – in public institutions and 31 – in project implementation units.

The National Bank of Moldova, an independent institution, and MOLDATSA together account for 226 of the 439 positions with remuneration above 50,000 lei – more than half of the total.

The analysis identified three causes that allow such excesses to appear. In some entities, leaders directly or indirectly influence the determination of their own remuneration, while boards do not sufficiently exercise their control role, remuneration committees are optional and mandates are cumulated. Second, there is no central register, no standardized reporting of the entire remuneration package, and no risk-based control mechanism, while caps can be bypassed through bonuses, benefits or profit-based payments. Third, the examination of six management contracts shows that mechanisms linking remuneration to performance exist formally, but are weak in practice: targets are not always set before the evaluation period, multiannual indicators are missing and mechanisms for withholding, deferring or clawing back bonuses are insufficient.

“We cannot rely on people’s trust without cleaning up such an important area. We want to address excesses, but at the same time we must ensure that we do not penalize competence. The state must be able to attract professionals, including in highly specialized fields. But a high salary must be explainable: by the complexity of the work, results, responsibility and integrity. We do not accept remuneration set non-transparently, by those who receive it, without clear objectives and without accountability. We are intervening in a targeted, but determined way, where there are excesses,” said Prime Minister Vasile Tofan.

The government will act within the limits of its competence. The cabinet of ministers can intervene directly in government agencies, subordinated institutions, state-owned enterprises and companies in which the state exercises the rights of founder or shareholder, through normative acts, decisions of the founder, mandates granted to state representatives and the revision of management contracts. The National Bank of Moldova, the National Financial Market Commission, the National Energy Regulatory Agency and the National Regulatory Agency for Electronic Communications have, by law, autonomous or independent status, and their remuneration policies cannot be changed by administrative order. For these institutions, the analysis will be sent to their governing bodies and to parliament, requesting equivalent standards of transparency and governance, while observing functional independence and European obligations.

To remedy the identified problems and prevent their reoccurrence in the future, the government proposes a package of measures built around three main directions.

The first direction aims to stop discretionary payments and correct the largest remuneration packages. The Public Property Agency and founding authorities will review around 100 of the largest remuneration packages – fixed salary, variable part, material assistance, bonuses, benefits and profit-based payments – and management contracts will be assessed in relation to the size, complexity, risks and results of the entity. During the review, for positions that exceed the equivalent of three average salaries on the economy, the suspension will be proposed of the approval of new one-off bonuses, annual bonuses or similar payments, without affecting rights already due under law or contract. Heads and deputies of public institutions, project implementation units and companies with public capital that exceed the established threshold will no longer benefit from annual material assistance, an instrument that has, in some cases, enabled unjustified additional payments. At the same time, in 2026, dignitaries, staff in political offices and civil servants appointed to the boards of entities with public capital will not receive rewards paid from net profit, beyond the established participation allowance.

The second direction seeks to increase transparency. The government will create a single platform showing positions, salary bands, remuneration components and allocation rules, in a comparable and easy-to-understand format, in compliance with personal data legislation. In addition, state-owned enterprises and companies with public capital will present quarterly financial and operational results, and agencies and public institutions – at least semi-annually, so that the remuneration of management can be assessed in relation to the entity’s goals and results.

The third direction concerns improving the way public entities are governed. In this regard, the government will propose measures that require changes to legislation:

Boards will generally have at most 3 members and, in justified cases, a maximum of 5. A dignitary or civil servant will be able to represent the state on only one board and for no more than two terms, and the monthly allowance of the state representative will be capped at one national minimum wage.

In state-owned enterprises and companies with public capital that fall below size and strategic-importance thresholds to be set by law, boards will be eliminated, with oversight returning to the founder, accompanied by mandatory reporting and audit.

Audit committees of censors will be abolished, as they have not showed effective control. Responsibility will lie with the board and its committees, including the audit committee, and where there is no board – with the founder and internal and external audit mechanisms.

The administrator or any person with an executive role will not be allowed to set or approve, directly or indirectly, in their own benefit, bonuses, allowances, indemnities or other additional payments. The remuneration policy will be approved by the founder and the board, with an annual public report.

Anti-avoidance rules will apply the caps to the entire remuneration package: salary, bonuses, allowances, profit-based payments, insurance, cars, housing, preferential loans and any other advantage granted in connection with the position.

Management contracts will contain measurable objectives, targets set before the evaluation period, financial, operational, strategic and compliance indicators, as well as mechanisms for non-granting, deferring and clawing back bonuses when results are disproved or damages occur.

Atypical increases in the variable part, exceeding caps and the cumulation of indemnities will trigger checks by the State Financial Control Inspectorate, and illegal payments may be declared null, with the recovery of amounts and liability for those who approved them.

For independent authorities, the government will propose to parliament and to their governing bodies a framework for transparency, performance reporting and justification of remuneration, adapted to their legal status.

The measures will be subject to consultation with founding authorities, employees’ representatives, corporate governance experts, independent authorities and civil society, and relevant proposals will be integrated into government decisions and draft laws. Implementation is planned in three stages: launching the review of contracts and discretionary payments, with a clear mandate for the Public Property Agency and founders; publishing the remuneration catalogue and the first standardized reports; adopting legislative amendments on boards and censors’ commissions, caps, management contracts, control and liability.

The government aims to correct excesses where they exist, without weakening institutions and without affecting the remuneration of the majority of public sector employees. The interventions are targeted and the systemic changes aim to prevent abusive situations in the future, so that each leu of public remuneration can be explained by responsibility, results and merit.

The ultimate objective is to correct excesses without weakening institutions, to pay competence fairly and to build a system in which every leu of public remuneration can be explained by responsibility, results and merit.