MB Subba

The biggest change in approving the salary revision of state-owned enterprises (SOEs) has been doing away with the 25 percent corporate allowance and the flat bonus system SOEs declare every year depending on their performance.

Sharing the details of the revision yesterday, Finance Minister Namgay Tshering said that the Cabinet discussed the revision twice and decided to peg the salaries of corporate employees with that of civil servants.

The salaries have been increased from 6 percent to 35 percent, he said. “This is mainly because we don’t want to see distortions in the pay raise,” he said.

The finance minister said corporate employees will get a minimum of 15 percent higher than general civil servants’ salaries excluding teachers and health workers.

He said that the government collected views from the SOEs on the pay raise.

He described pegging the corporate salaries with that of civil servants as one of the major changes.

“Some company employees used to get position specific allowances and that’s not applicable to all the companies. And some companies used to get company specific allowances and these are specially tagged to profits made by the companies, which means that companies that are making the profits are getting that allowance.”

However, Lyonpo Namgay Tshering said that those companies with social mandate were not getting that company specific allowance. The government, he said, did not see that the company specific allowance and the position specific allowance were required.

“We wanted to give all the companies an equal raise. All the SOEs used to get a corporate allowance of 25 percent. That has been replaced by a house rent allowance of 20 percent.”

He said that the government analysed the rationale behind providing the corporate allowance and that it was given in lieu of house rent allowance.

“You might think that we have removed what you have been entitled to. We are already in the 21st century. I think we have to take our salaries with our performance.”

Lyonpo Namgay Tshering said that the government had an in-depth discussion. “We did not want to have distortions between the salaries of civil servants and corporate employees.”



The performance based value incentive (PBVI) ranges from 15 percent to 50 percent based on performance and will be paid annually.

“A company that performs below a satisfactory level will get at least a 15 percent PBVI, which civil servants don’t get,” Lyonpo Namgay Tshering said.

This, he said, makes corporate employees higher-paid employees than civil servants.

According to the finance minister, SOEs with the performance rating of “good” will get a 25 percent PBVI, 35 percent allowance for the “very good” and 50 percent PBVI for the excellent performance.

“Please be mindful that this performance based allowance is independent of the financial performance of the SOE. This is because some companies have social mandate. This will be applicable to employees including the CEO,” he said.

Lyonpo Namgay Tshering said SOEs needed to perform at a different level and that the government had streamlined the system and it’s well structured.

“When it comes to how we can narrow the salary gap between the private sector employees and the public servants, we will address the issue in the upcoming winter session of the Parliament through fiscal measures and fiscal incentives that will encourage private sector to increase employees’ salaries.”

Meanwhile, the minister did not clarify if the daily subsistence allowance (DSA) have been increased.

Corporate employees expressed unhappiness about the pay revision saying that the existing entitlements should not have been withdrawn.

A corporate employee said the company specific allowance is a part of allowances retained to pay out at the end of the year based on the set target achieved by the company.

“If this kind of target is not there in the SOE, then the company service would become like government agencies where they get allowances or perks whether they work or not.”

He said that the company specific allowance which was paid out at the end of the year was important to ensure that the targets are met which is related to profit and efficient service.

Some corporate employees said that the annual bonus was required to motivate corporate employees to perform. “There is a difference between civil servants and corporate employees in terms of performance. Corporate employees are required to work more,” said a corporate employee.