The revision will be effective from January 2015.
Salary: Druk Holding and Investments (DHI) also has a Losar offer to its employees, it announced on the eve of the lunar New Year yesterday.
Representatives of DHI-owned companies approved the pay revision proposal on February 17, and the guideline on how it would be raised will be circulated shortly.
Employees of DHI-owned companied will get a revision between 1.5 percent to 8.5 percent on the gross salaries, following a top down approach, meaning those on top will get a lower revision, while those at the lower levels will get a higher raise.
But the revision for DHI companies will only come into effect from January 1, 2015, while the revision for the SOEs would be applied retroactively from July 1, 2014.
DHI chairman Dasho Sangay Khandu said there was hardly any revision on the basic salaries, but that it was the performance-based variable allowance (PBVA), which would be revised from 10 to 15 percent, and corporate allowance from five to 23 percent.
“Overall, the revision package is far less than the civil servants’,” he said. “The net difference between civil servants and employees of DHI companies is still maintained at 15 percent,” Dasho Sangay Khandu said.
For instance, he explained that the salaries and allowances (PBVA and corporate allowance) for employees of DHI-owned companies totted up would maintain a difference of 15 percent from the civil servants’ total salary income (basic salary and additional housing allowance).
However, chief executive officers of various DHI-owned companies, who had slashed their salaries by five percent in July last year, would continue to draw the same salaries.
The chairman said that the revision was done in consideration to the financial outlook of the companies and country’s economy.
By not revising the basic salaries, he said, the companies’ share of contribution to provident fund and others would not increase. “Besides the country’s economic situation, businesses in the DHI companies weren’t as good as it used to be,” he said.
While there are few companies that generated more revenue, he said, that it was important to understand that such companies enjoyed monopoly, and a high raise could pose undue burden on the people.
For example, Bhutan Power corporation and Druk Green Power corporation can afford a bigger raise. But, the chairman said, by doing so, the operation costs of the companies would increase, translating into higher power tariff, which must be borne by all citizens.
Apart from this social mandate, the chairman also said that the DHI had to meet the dividend obligation to the government.
Similar to SOEs, affordability of individual companies would also be taken into account for the raise, and the board had to ensure that the cash flow requirement was met.
“When business is down and economy in recession, it isn’t a right time to revise the salaries,” he said. “I don’t understand why the finance ministry has approved the raise effective from July 2014, but it has set a precedence and employees of DHI companies will also demand the same.”
Meanwhile, the PBVA would depend on the overall performance of the corporations, based on the target achievements set during the annual compacts between DHI and its companies.