Based on a regulation issued by the State-owned Enterprises minister on 31st May, the government of Indonesia has decided to increase the salaries of board of directors of state-owned enterprises (SOEs). 

With the new regulation, the salary of Deputy President Directors will be 95 percent that of President Directors, marking an increase of 5 percent. 

Human Resources Directors and other directors will have the salaries that are 90 and 85 percent of President Directors’ salaries, respectively.

Besides the salary, the bonus for various roles also rises. The bonus for Deputy President Directors increases from 90 percent to 95 percent that of President Directors, while hHuman Resources Directors' bonus increased to 90 percent and other directors to 85 percent.

Last year, in 2018 the salaries and bonuses of 11 directors of state-owned lenders were at Rp 175.85 Bn annually, a 15.9 percent increase from Rp 151.72 Bn in 2017, while the amount in bonuses was Rp 2272.53 Bn in 2018, a 38.74 percent increase from Rp 196.42 Bn in 2017.

In Indonesia, the state-owned enterprises (SOEs), play a crucial role in the national economy. They contribute towards national economy growth, providing goods or services which are not covered by private company, employment provider, providing support guidance to small and medium businesses, and source of government revenue. As SOEs are critical for Indonesia’s growth, increasing the salaries of the board of directors could be a strategic move by the government to increase the morale of the leaders as more responsibilities fall on their shoulders.