Berlin state companies can increase profits significantly

The affiliated companies in the state of Berlin apparently got through the first two years of the pandemic well – also because of the Corona aid. The 57 public law companies or institutions were able to increase their profits to a total of 743 million euros last year.

This is the best result of the portfolio companies in the past five years. In the 2020 financial year, the profit was still 232 million euros. The amount of corporate investment has remained roughly the same, around 3.6 billion euros in both 2020 and 2021.

The figures come from the Participation Report 2022, which the Berlin Senate approved last week and which is available to Tagesspiegel. “The positive overall result and level of investment is a great success in light of the pandemic crisis year,” said Finance Senator Daniel Wesener (Greens). “Berlin’s state holdings are financially sound and ensure the city’s basic needs.” The report also confirms that the federal and state corona aid has been used well, says Wesener.

The state of Berlin has direct holdings in 49 companies under private law and in eight institutions under public law. Most of them from the sectors of transport and services, regional development and property management as well as culture and leisure. The companies include the six state-owned housing companies in Berlin. 33 companies are 100 percent owned by the state.

Berlin-Brandenburg Airport is still in crisis

A total of 50 companies reported a positive or balanced result for the financial year 2021, above all Berliner Wasserbetriebe with a profit of 198.36 million euros and Investitionsbank Berlin (IBB) corporate administration with 290.79 million euros, with the result of IBB due to, among other things . a “positive one-off effect”, as the report states.

Flughafen Berlin Brandenburg GmbH (EUR 208.6 million) tops the list of the seven companies where losses dominated. It is followed by Berlin Energie und Netzholding (8 million euros), Olympiastadion GmbH (1.21 million euros) and Berliner Bäder Betriebs (0.63 million euros).

When it comes to the necessary contributions from the state of Berlin, the BVG is ahead. With 886.77 million euros, it received three quarters of all contributions in the country. The state-owned housing companies, in turn, accounted for more than half of all investments in the financial year 2021, to two billion euros.

Board member of IBB earns best

The annual report published by the Senate Finance Administration is also always watched with interest for the development of management salaries. Although the state of Berlin has no direct influence on this, in recent years there has been criticism that the salaries of some top managers have increased dramatically, although the economic figures hardly justify it overall.

This year’s report shows that wages in most cases changed only slightly. The top earner is Angeliki Krisilion, board member of the investment bank Berlin. In 2021, including all bonuses and other payments, she received 445,000, 40,000 more than the previous year.

The remuneration of the board members in the state-owned companies has in some cases gone completely out of control.

Jörg Stroedter, economic and political spokesman for the SPD’s parliamentary group

Stephanie Otto, CEO at BSR, made the biggest jump in salary, receiving €426,000 in 2021, almost double the previous year. In third place comes former airport manager Engelbert Lüdtke Daldrup with 416,000 euros, 77,000 less than in 2020.

Not only the top earners, but a large number of the board members of the Berlin investment companies earn more than the ruling mayor Franziska Giffey. She gets a little more than 200,000 euros for the exercise of her office.

Called for more parliamentary co-determination

The economic policy spokesman of the SPD parliamentary group, Jörg Stroedter, recently criticized this imbalance in the Tagesspiegel. “In some cases, the remuneration of the board members in the state-owned companies has gone completely out of hand,” says Stroedter. “I don’t mind if good people make good money. But if someone in a position like that gets paid twice as much as the incumbent mayor, then that’s inappropriate.”

Stroedter also sees responsibility for this in the supervisory boards and called for the Danish Parliament to have a greater influence on the selection process. According to the annual report, the state of Berlin has currently appointed 255 members to the relevant supervisory bodies. “I am critical of the fact that the composition of the board is determined solely by the executive board,” said Stroedter. “If Parliament, which is supposed to control the Senate, has no say, that’s problematic.”

According to the Senate Finance Administration, the state-owned enterprises have an “overall fair remuneration ratio”. CEOs would earn an average of 7.8 times more than employees. The ratio of average management compensation (executives) to employee compensation will average 5.2 to 1. In DAX companies, this ratio was 48 to 1 in 2020.

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