Mayors receive substantial severance payments in Reykjavik metropolitan area

Local mayors in the Reykjavik metropolitan area have received substantial severance payments upon leaving their positions, a practice not uncommon within Icelandic municipalities. This has been highlighted after recent changes in leadership, including the departures of long-serving mayors following local elections.

Among those stepping down were Gunnar Einarsson, who served 17 years as mayor of Garðabær, and Haraldur Sverrisson, who held the position in Mosfellsbær for 15 years. Dagur B. Eggertsson also left his post as mayor of Reykjavik after a decade of service, handing over the keys to his office earlier this year.

Typically, mayors are entitled to severance pay defined in employment contracts, which usually consists of six months’ salary, as well as accrued vacation pay. For example, Eggertsson received approximately 9.7 million ISK in vacation settlements and had the right to an additional 18.2 million ISK in severance pay after deductions for his new role as a city councilor.

Compensation packages of this nature are not unique for departing mayors in large municipalities. Einarsson received 7.8 million ISK for unused vacation time when he left two years ago. Other mayors like Ármann Kr. Ólafsson of Kópavogur and Sverrisson also received significant sums for accrued vacation upon their departure.

Experts emphasize that it is standard to settle unpaid vacation upon termination of employment, and that challenges in taking vacation time often occur in high-pressure executive roles. New mayors are typically given a maximum of 10 days of vacation carryover, while any additional accrued days would expire.