New MFSA boss placed on an indefinite €175,000-a-year package

The Malta Financial Services Authority CEO Kenneth Farrugia, who was handpicked for the job without a public call has been placed on an indefinite contract of around €175,000 a year, The Shift can report.

Documents obtained by The Shift following a freedom of information request show that, unlike his predecessors, the new MFSA boss was not given a fixed-term three-year contract, as is normally the case for such high-profile public positions, but was instead placed on an indefinite contract.

Farrugia’s contract, which makes him one of the highest-paid public sector employees, specifies that if his employment at the Authority is terminated for whatever reason, he will still be paid the full €175,000 package for at least a year.

His appointment was made by the MFSA’s Board of Governors, all of whom are appointed directly by the government.

Justifying Farrugia’s handpicking, the MFSA said it had not issued a public call due to the urgency of the appointment.

The MFSA, however, has known since at least the summer of 2022 of the need to fill in the vacancy following the resignation of former CEO Joseph Gavin.

According to his contract of engagement signed by MFSA Chairman Jesmond Gatt, Farrugia is to be paid a basic annual salary of €115,000, which will increase by €4,500 a year up to a maximum of €128,500 a year.

Farrugia has also been given a 25 per cent per annum “monitoring allowance”, reaching over €30,000 a year, as well as an additional €15,000 annual “cash allowance”.

Before being handpicked for the MFSA, Farrugia spent years heading the Financial Intelligence Analysis Unit when Malta was slapped with a Financial Action Task Force greylisting.

It was only after Malta’s greylisting and international pressure that the FIAU, together with other institutions, pulled up its socks to salvage the situation.

The FIAU is currently also facing multiple negative court rulings due to the unconstitutional way it has imposed sanctions and fines on financial services providers found breaching anti-money laundering rules. The FIAU’s ways and means of meting out fines have been declared by the court as illegal and in contravention of human rights.