Chile’s Billionaire President Piñera Gets a Raise

Chile’s billion dollar man, Sebastian Piñera, has a US$30 billion dollar problem on his hands. That’s the estimated price tag of damage caused by last month’s monster 8.8-magnitude earthquake.  Fortunately for Piñera, economic hard times and government cuts to fund reconstruction won’t effect his salary: this billionaire president just got a raise.

Chile’s billion dollar man, Sebastian Piñera, has a US$30 billion dollar problem on his hands. That’s the estimated price tag of damage caused by the monster 8.8-magnitude earthquake that wreaked havoc on Chile Feb. 27, less than two weeks before Piñera was inaugurated president.

The new conservative government, Chile’s first since Augusto Pinochet, has already said it will modify the 2010 budget, making whatever cuts it deems necessary to come up with cash to fund the reconstruction. Fortunately for Piñera, those cuts won’t affect his own salary, which is approximately US$800 more per month than what his predecessor, Michelle Bachelet, earned.

According to a government Web site, the new president – who was sworn in March 11 – will earn just under US$15,000 per month (US$178,000 per year), a 5.7 percent increase over Bachelet’s 2009 paycheck. Don’t blame inflation. Chile’s price index actually dipped last year, down 1.7 percent.

Just the extra that Piñera will earn is roughly two-and-a-half times Chile’s minimum monthly wage of 165,000 pesos (US$317). His overall monthly salary represents 47 minimum wages. Still, it’s not clear weather the paycheck will be enough to meet the new president’s needs. In an interview this past January, the then president-elect said Chile’s executive salary wouldn’t “stretch.”

“I have commitments, like paying the loans that I used to finance my presidential campaign, and the expenditures of foundations like Futuro, Mujer, Emprende and Tantauco. All of that requires a lot of resources. There are many projects, and the presidential salary doesn’t stretch for all that.”

Instead, Piñera said he would have to dip into his own pockets, which are known to be extremely deep. Owner of a major television station; a large stake in LAN, the nation’s number one airline; and a significant share of Colo Colo, Chile’s top soccer club, Piñera is already one of the world’s wealthiest people.

In 2009, Forbes listed him in a several-way tie for the 701st position on its billionaire’s list, citing the politico-tycoon’s personal wealth at approximately US$1 billion. Piñera fared even better this time around. On Forbes’ new list, published March 10 – the day before Piñera assumed office – the Chilean president figures in at number 437. The US magazine estimates his personal worth at US$2.2 billion.

To fend off concerns about possible conflicts of interest, Piñera promised to divest himself of his numerous business ties before assuming office. Eight days after being sworn in as president, he has yet to fully make good on that promise.

Piñera has decided not to sell his 13 percent stake in Colo Colo. His Chilevision TV station, in the meantime, is being held in a blind trust. According to news reports, the trust will be managed by a group called Fundación Cultura y Sociedad, a spinoff of the Fundación Futuro y Sociedad over which Piñera already presides. Critics worry the trust will be more “one-eyed” than blind.

The biggest concern, however, has to do with Piñera’s continued ties to LAN. Until recently the president was the airline’s majority shareholder – with a total company stake of 26 percent. The president managed to unload a portion of his LAN holdings in late February but still retains an 11.3 percent stake. Piñera blames the earthquake for his failure to meet his own March 11 deadline. The new deadline is April 30.

Trying desperately to avoid the topic during a press briefing Thursday, new government spokeswoman Eva Von Baer insisted Piñera’s LAN delay “isn’t a government issue.”