Monday 26 September 2016

IFA pay review reveals former presidents received one year's salary as exit payment

Published 15/12/2015 | 16:19

Former IFA general secretary Pat Smith resigned last month after it emerged his salary package was worth €445,000
Former IFA general secretary Pat Smith resigned last month after it emerged his salary package was worth €445,000

A review of the pay and governance of the embattled Irish Farmers’ Association (IFA) shows former presidents received a termination payment worth one year’s salary as they exited their post.

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It follows a crisis within the farm body that saw the resignation of former general secretary Pat Smith, after it emerged he received a salary package of almost €1m over two years, followed by former president Eddie Downey stepping down.

The detailed report from former IFA chief economist Con Lucey found –

·         The president should not be a member of the remuneration committee.

Review: Con Lucey
Review: Con Lucey

·         Clear procedures need to be agreed by the executive council to handle its business more efficiently.

·         The position of general secretary should in future be designated the chief executive.

·         A new post of secretary should be created, which would have a high degree of independence from the chief executive.

·         A full set of financial accounts should be made available on the IFA website.

The examination of the pay of the president and deputy president from 2009 to 2015 shows each received a recipient of a termination payment that was worth one year’s remuneration upon leaving office.

In 2009, former president Padraig Walshe received €175,000, including the use of the car, while in 2013 John Bryan received €169,400 in total including IFA Telecom fees.

It states that when Mr Smith took up the post of general secretary in 2009 he received a total package of €469,430, including his pension contribution.

On the remuneration of the president and deputy president, Mr Lucey’s report states: “The main problem is that the level of salary has become disconnected from the original purpose of the payment, which was to ensure that the farm did not suffer during the term of office.”

It also states there was no clear ruling on payment from directorships of outside bodies. It states the remuneration committee will make recommendations to the executive council on payments on such payments in future.

On executive salaries it states those are “broadly in line with those of the grades in the civil service”.

“Ultimately it is market forces that determine pay levels in the IFA. IFA has to be able to recruit the best available talent from the public or private sector,” Mr Lucey’s report states.

The executive board have also been under pressure after nearly half of the IFA’s county executives voted in favour of their resignation. Most of the remaining counties opted to hear the outcome of Mr Lucey’s review before making up their minds on it.

Mr Downey, who recently claimed his reputation had been “shattered”, sat in as Mr Lucey delivered his much touted report.

Late last month, Mr O’Leary announced that Mr Lucey had agreed to come back to review the pay and governance structures within the associate.

He had agreed to review all aspects of the remuneration package of the former general secretary from his appointment in 2009 until he resigned in 2015, and also that of the president and deputy president.

He was also tasked with making recommendations on the remuneration committee, which will set the pay of the general secretary, president and deputy president. In addition, Mr Lucey was reviewing the executive staff salaries within the IFA and also the expenses of voluntary officers in the association.

Mr Lucey was working as part of the IFA’s audit committee around 18 months ago but stepped down citing alleged ‘interference’ by Mr Smith and he also highlighted a lack of accountability in senior level pay for the top two posts in the organisation.

Former IFA general secretary Mr Smith resigned last month after it emerged his remuneration amounted to almost €1m over two years, with a package of €535,000 in 2013. A controversial €2m ‘golden handshake’ was agreed as he left the organisation.

Then former IFA president Mr Downey resigned after it was said he had signed off on the package.

Mr Downey claimed he was “thrown under a bus” at the meeting of farmers. He said he had approval, and did not act on his own, when reaching a controversial €2m severance agreement with Mr Smith.

It was confirmed Mr Downey received €147,000 and also received monies for directorships.

Mr Smith, who recently called for €1m of the package to be given to charity before Christmas, is in dispute with the IFA over the redundancy package. The IFA have insisted they will contest the exit package.

He has launched a High Court action against the IFA, with papers lodged last Friday.

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