Danylo Hetmantsev, the head of the Verkhovna Rada’s Finance Committee, has launched a sharp critique of executive compensation at Ukraine’s state-owned banks, calling for immediate restrictions on salaries paid to supervisory board members and top management. The outspoken parliamentarian’s comments have reignited a long-standing debate about appropriate compensation levels in the public sector, particularly during wartime when millions of Ukrainians face economic hardship and the country relies heavily on international financial assistance.

Hetmantsev’s remarks, which included the pointed rhetorical question “Have they lost their minds?”, reflect growing frustration among some Ukrainian lawmakers over what they perceive as excessive compensation packages at institutions that are ultimately owned by the state. The criticism comes at a sensitive time when Ukraine is navigating unprecedented economic challenges while maintaining its defense against Russian aggression, raising questions about resource allocation and public sector accountability.

The Scale of Executive Compensation at Ukrainian State Banks

Ukraine’s state banking sector includes several major financial institutions, with Privatbank, Oschadbank, and Ukreximbank being the largest. These banks were either nationalized or have remained under state control for decades, making their management compensation a matter of public interest and parliamentary oversight. Reports indicate that top executives at these institutions receive salaries that significantly exceed those of senior government officials, including ministers and the prime minister himself.

The disparity has drawn attention from multiple political quarters. Supervisory board members at state banks, many of whom are international experts recruited to improve corporate governance, reportedly receive substantial monthly fees for their advisory roles. While proponents argue that competitive compensation is necessary to attract qualified professionals who can effectively manage banks with billions in assets, critics like Hetmantsev contend that such payments are inappropriate given the current circumstances facing Ukraine and its citizens.

Historical Context and Reform Efforts

The debate over state bank executive compensation is not new in Ukraine. Following the 2014 Revolution of Dignity, the country embarked on an ambitious financial sector reform program, supported by international partners including the International Monetary Fund and the World Bank. Part of this reform involved professionalizing the management of state-owned banks by establishing independent supervisory boards staffed with experienced international bankers and financial experts.

The logic behind offering competitive salaries was straightforward: to attract talent capable of transforming institutions plagued by corruption, mismanagement, and non-performing loans. Privatbank, nationalized in 2016 after a massive fraud scandal involving its former owners, became a particular focus of these reform efforts. The bank required a government bailout of over 155 billion hryvnias, making effective management crucial for protecting public funds. However, as the war continues and ordinary Ukrainians tighten their belts, the political calculus around these compensation packages has shifted dramatically.

Broader Implications for Public Sector Governance

Hetmantsev’s initiative to cap compensation at state banks could have far-reaching implications for Ukraine’s approach to public sector governance. If enacted, such restrictions might affect the country’s ability to recruit and retain qualified financial professionals, potentially impacting the stability and performance of institutions that hold deposits for millions of Ukrainians. On the other hand, supporters argue that demonstrating fiscal responsibility and solidarity with ordinary citizens during wartime takes precedence over market-rate compensation.

The discussion also touches on broader questions about transparency and accountability in Ukraine’s public sector, issues that remain central to the country’s aspirations for European Union membership. International partners have consistently emphasized the importance of good governance and anti-corruption measures as conditions for continued support. How Ukraine balances these sometimes competing priorities—attracting professional talent while maintaining public trust and fiscal discipline—will likely influence both domestic politics and international relationships in the months ahead.