DCC bonus clawback scheme won't target Flavin's payout
Published 04/07/2010 | 05:00
Tommy Breen's €1.5bn valued DCC is considering introducing a bonus "clawback" scheme for its top executives.
The peanuts-to-Playstation distribution conglomerate was flayed when it paid former boss Jim Flavin a €150,000 special bonus despite ending up on the losing side of a damaging insider dealing lawsuit, which saw it pay €38m to fruit company Fyffes after selling shares in the company.
Flavin resigned in 2008 after waiving a €500,000 bonus for the year.
DCC hired remuneration consultants Towers Watson to review its pay structure last year. Following the review, DCC is looking to introduce a "general provision for subsequent clawback of bonus, in certain circumstances".
Global companies have introduced bonus clawbacks as a way to take back rewards if executives fudge financial figures or fail to perform.
Recently German bank Commerzbank, which has operations in the IFSC, rolled out a scheme to tie executive rewards to medium-term performance and also to punish both management and staff who take "undue risks''.
The recent G20 meeting saw a bonus clawback scheme discussed for the entire banking sector, a move which has been widely opposed by bankers.
The DCC bonus clawback scheme being considered will cover the earnings of Tommy Breen and his top executives from 2011 onwards, according to a company spokeswoman. Flavin's previous bonuses will not be targeted under this scheme.
"If a clawback arrangement was introduced it would not affect the remuneration of ex-employees," she added.