Business Irish

Wednesday 18 October 2017

Former ESB boss received a package of €700,000 last year

Peter Flanagan

Peter Flanagan

THE pay packet of former ESB boss Padraig McManus jumped by more than a quarter to nearly €700,000 last year -- even after taking a voluntary cut on his basic salary and only working for 11 months of the year.

He also took a €99,000 lump sum for not working out his notice.

Accounts for the semi-state published yesterday show Mr McManus took home €674,887 in 2011, an increase of some 27pc on his earnings a year earlier.

Mr McManus, who was the highest paid semi-state executive, retired at the end of November after more than nine years as chief executive of the electricity company.

In 2011, he took a voluntary 5pc cut in his basic salary on top of a 10pc cut in 2009, reducing it to €373,452.

However, a bonus of €84,199, a €99,401 lump payment for not working out his notice period, and an increase in pension contributions meant he pocketed far more than the €528,886 he did in 2010.

The Government has effectively banned semi-states from paying bonuses since 2010, but Mr McManus received one of €84,199 for work done in 2009. ESB said the payment was awarded as part of a contractual arrangement in 2009.

It was delayed, however, until the company had resolved its pension deficit, which was not done until late in 2010 when the bonus was approved. It was finally paid early last year.

Mr McManus also received a one-off payment of €99,401 for "payment in lieu of notice", which allowed him to be paid the fee instead of having to discharge the six months notice his contract entitles him to.

ESB said: "Standard ESB management contracts allow for either party to opt for giving a period of notice or to receive payment in lieu of that notice period".

It was agreed "by mutual consent" in this case.

A spokesman for the Department of Energy said it was involved in new contracts for semi-state executives but as Mr McManus's contract had been agreed a number of years before, it was a matter for him and the ESB board.

Public Expenditure Minister Brendan Howlin introduced caps on the salary of semi-state companies last year but they only apply to new contracts.

In February last year the Department of Finance wrote to government departments highlighting that civil servants who were members of remuneration committees on semi-states "adopt the position that [bonus] payments are inappropriate".

The current ESB chief executive Pat O'Doherty is on a basic salary of €295,000, below the maximum allowed of €318,083.

This is not the first time Padraig McManus's pay has caused controversy. The Irish Independent reported in January he would receive a retirement package of as much as €800,000 this year and be entitled to cut-price electricity.

He took home a total of more than €750,000 in 2009 including performance-related pay of more than €208,000, and earned more than €650,000 in 2008.

Speaking after a business lunch in April last year he defended his pay packet and questioned if the company would be able to find an adequate replacement for him if the Government capped the new CEO's salary at €250,000.

"What you do have to remember is that it is a very large company, it managed its business very well, it was not responsible for any collapse," he said.

"It will be difficult in the future to see a chief executive of the ESB paid less than the chief executives of the state-owned banks."

Irish Independent

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