North Central State Enterprise SC - Gabrovo - Short Company profile

The draft budget for 2026 is expected to have a large deficit, but with the expected increase in the minimum wage, new record levels of remuneration are expected in the boards of state-owned companies. With a possible increase in the minimum wage to 1,213 leva from January 1, the maximum salary of executive directors of state-owned companies will already approach 22,000 leva. The salaries of executive directors are calculated according to a formula depending on a series of indicators, and there is an upper limit - it cannot exceed 18 times the minimum wage. With a minimum wage of 1,077 leva for 2025, the maximum was 19,386, with the expected increase in the minimum wage to 1,213 leva, the limit jumps to 21,834 leva. The salary limit for ordinary board members. is 6 minimum wages or salaries up to 7278 leva from 2026. In 2022, the OECD published a special report on the models for calculating remuneration and the levels achieved for executive directors and management and supervisory boards in state-owned companies in 36 countries. Out of a total of 22 countries that provided data, Bulgaria was in the top five in terms of high annual salaries of ordinary board members, with a level of 125% compared to the average annual salaries in the country. In addition to receiving high salaries compared to the average annual salaries in the country, members of the boards of state-owned companies in our country are among the few who are entitled to bonuses depending on the results. These are the so-called bonuses, which are given when profits increase and there are no uncovered losses or overdue debts. Only 6 out of 36 countries provide for such additional incentives, and in addition to Bulgaria, the group includes Chile, the Czech Republic, Peru, the Philippines and Slovakia. In absolute terms, the salaries of the CEOs of Bulgarian state-owned enterprises are low compared to other countries. However, if the levels are measured against the average salaries in the country, we are closer to the middle. The OECD has very serious requirements for substantiating the need for the existence of state ownership, guaranteeing the rules of fair competition and the legal form under which state-owned companies should function. The organization is fundamentally against the creation of special legal forms for the existence of state-owned enterprises and recommends adhering to general corporate law, as well as transforming enterprises established under special laws into ordinary commercial companies, if they primarily carry out commercial activities or into administrative structures, if they pursue more public goals. In implementation of this policy, Bulgaria has been trying to adopt a program for the transformation of state-owned enterprises established under special laws since 2022, and has not succeeded. This list includes a total of 16 state-owned enterprises, including NRIC, RVD and ports, and state-owned forestry enterprises. By law, these enterprises cannot declare bankruptcy, some of them are explicitly prohibited from taking on debt or issuing guarantees. Many of them do not carry out commercial activities for profit. By law, these state-owned enterprises are both traders and not commercial companies. The most recent analysis for transformation prepared for this purpose was updated a few days ago by the Zhelyazkov government. The government explained how it does not see a need to transform the majority of enterprises regardless of the opinion of the OECD and insists that the legal form of these enterprises does not prevent this and there are other countries in which state-owned companies exist under special laws. The case of the Bulgarian Sports Totalizator is interesting, as according to the latest concept of the cabinet, the company performs mainly commercial activities and will be transformed into an EAD within 36 months. The Kabiyuk State Enterprise was also evaluated as an enterprise that was initially assessed as performing mainly public functions, and subsequently - exactly the opposite - with mainly commercial activities. Within one reporting year - 2024, the DKK was managed by a total of 5 executive directors. There were intentions to transform some of the existing enterprises, such as forestry, into separate economic entities, which were also dropped. Thus, for most of the 16 special enterprises created by laws, the latest version of the program provides for maintaining the status quo.