The total remuneration of Christine Lagarde reaches approximately 726,000 €, which is 56% more than the salary officially disclosed by the ECB. This discrepancy reignites the debate on salary transparency within European institutions and their governance.
Lagarde: an Unparalleled Level of Remuneration in Europe
With nearly 726,000 euros annually, Christine Lagarde is by far the highest-paid official in the European Union. For comparison, the President of the European Commission earns a base salary about 21% lower. The contrast is even more striking internationally. The President of the Federal Reserve, Jay Powell, earns around 203,000 dollars per year, capped by US federal law. Hence, the ECB President earns nearly four times more than her American counterpart.
If this remuneration remains modest compared to the leaders of major listed European companies, it raises a central question: why is the true figure so far from what is highlighted in official reports?
Less Visible Complements in Public Reports
The differential is explained by several elements not individually detailed in the ECB publications. In addition to her base salary, Lagarde benefits from around 135,000 euros in kind advantages, covering housing and other expenses related to her role.
Added to this is an estimated remuneration of 125,000 euros for her role on the board of the Bank for International Settlements, often referred to as the ‘central bank for central banks.’ This remuneration does not appear in the ECB’s annual report, as the BIS only publishes aggregated data for all its directors.
Not to mention, due to insufficient public data, the ECB’s contributions to Lagarde’s pension, as well as the costs related to her health coverage and insurance, are not even included.
Insufficient Transparency Criticized
This situation highlights a regulatory asymmetry. Unlike listed companies, subject to strict obligations for detailed disclosure of executive compensations, the ECB is not required to provide a comprehensive and consolidated view of its board members’ incomes.
Several politicians denounce this lack of clarity, considering it paradoxical that public institution leaders are exempt from transparency standards imposed on the private sector. The debate focuses less on the level of remuneration and more on the quality of information provided to the public.
Financial Independence or Institutional Blind Spot?
Proponents of these salary levels put forth a well-known argument: the financial independence of central bankers also involves their financial independence. Academic research and IMF studies emphasize that a high and protected remuneration acts as a shield against political pressure, especially during inflation-fighting periods.
However, Lagarde’s case highlights a persistent tension between institutional autonomy and the demand for transparency. As the ECB plays a central role in the financial and monetary stability of the eurozone, the pressure to align its governance practices with the most demanding standards is likely to intensify.
