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Kaupþing Confirms Controversial Bonuses

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Kaupþing Confirms Controversial Bonuses

Money - Icelandic Króna

Photo: Páll Kjartansson

The general assembly of holding company Kaupþing, previously the defunct Icelandic bank, approved a proposal last night on paying bonuses of up to ISK 1.5 billion (USD 13 million, EUR 12 million) combined to key employees. Some of these employees will receive bonuses of around ISK 100 million (USD 860,000, EUR 771,000) each.

Representatives of foreign claimants attended the meeting, which was closed. The Central Bank of Iceland, which holds an approximate 6 percent share in Kaupþing (as well as in LBI, the holding company for the defunct Landsbanki), voted against the proposal, ruv.is reports.

The bonuses have caused controversy at Alþingi, the Icelandic parliament. A number of MPs have harshly criticized the plan, with Progressive Party MP Þorsteinn Sæmundsson proposing a 90 to 98-percent tax on the bonuses.

Former Commissioner of the Inland Revenue Indriði Þorláksson told Fréttablaðið that while bonuses are currently subject to taxes same as other income, it is possible to introduce a special tax for bonuses.

Minister of Finance Bjarni Benediktsson, who is chair of the Independence Party, stated he is open for suggestions as to how bonuses of this kind should be handled.

Independence Party MP Brynjar Níelsson, who is a lawyer by education and serves as first deputy chair of the parliament’s Economic Affairs and Trade Committee, commended that he doesn’t know of any ways for the legislation to prevent such bonus payments.

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