Saturday 10 December 2016

Pressure grows on Ornua and co-ops as pay kept secret

Martin Grant, Cormac McQuinn and Louise Hogan

Published 22/04/2016 | 02:30

The Ornua office on Dublin’s Mount Street. Photo: Damien Eagers
The Ornua office on Dublin’s Mount Street. Photo: Damien Eagers

Farmer-owned dairy co-ops have refused to reveal the salaries of their top executives despite pressure mounting for more transparency in the agri-sector, as farmers feel the pain of poor prices.

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The 14 directors on the board of dairy marketing body Ornua shared €509,000 last year and are mainly key figureheads in the country's farmer-owned dairy co-operatives.

They have refused to reveal their individual board fees. Most of the directors also declined or did not respond to queries on their own salaries on their own co-ops or farm bodies.

Rural TDs have warned the co-ops that they were farmer- owned - and there should be an entitlement to know what senior staff are being paid.

It follows the pay controversy at the Irish Farmers' Association (IFA) where it emerged the former general secretary had received a pay package worth almost €1m over two years.

The directors on the board of Ornua last year received €509,000 between all of them.

It marked a 44pc rise since the €352,000 paid in 2013.

The directors include Glanbia Ingredients Ireland chief executive Jim Bergin, Dairygold's Jim Woulfe and senior figures in the country's co- operatives such as Aurivo, Lakeland Dairies, Carbery, Tipperary and Arrabawn.

It comes as pressure also continues to mount on Ornua to break down the pay of its top executive team.

Under new accountancy rules, it confirmed nine top bosses shared €9.2m including pensions and benefits over the past two years.

But Ornua, formerly known as the Irish Dairy Board, yesterday reiterated its stance that it would not be giving any individual breakdown.

It stated as a "global, privately owned, commercial business with sales of €2.5bn in 2015, attracting and retaining talented staff is of strategic importance to Ornua".

It pointed out "executive and board remuneration, which is performance related and benchmarked against industry peers, is agreed and overseen by its remuneration committee with support from independent professional advisers".

Launching the Ornua annual report, chairman Aaron Forde, said they had a "strong governance" record with a remuneration committee in place. He stated they had went further than the "bare requirements" on setting out the pay of key personnel under new accountancy rules.

It pointed out farmers would share in a €29m bonus, including a once-off €15m payment, this week.

Fianna Fáil TD Jackie Cahill, a former vice-chairman of the Irish Dairy Board, believes executives salaries at Ornua and the major co-ops should be "transparent".

He told the Irish Independent that co-ops are farmer- owned and "shareholders are entitled to know what the individuals are being paid".

The Tipperary TD said there had to be an acceptance that the pay rates for "top-class chief executives" were high.

But he added: "I think we deserve to know exactly what they're being paid and I think you own the company so you should know."

Dairy farmers have suffered a 40pc fall in milk prices since the highs of 2014 before the removal of quota.

Pat McCormack, from the farmer representative body, the Irish Creamery Milk Suppliers Association (ICMSA), said transparency on co-ops was an "issue" among farmers.

"A sense of ownership needs to be given back to the farmer, the primary producer. If they want to know they should be in a position to find out," he said, adding that more regular change of personnel was needed on co-op boards.

"When you elect the board you are picking people and giving them a mandate, you'd hope they would represent you in a reasonable manner."

However, he pointed out smaller co-ops may find it harder to "keep good" senior staff if pay was revealed.

As a dairy farmer, Mr Cahill said the "harsh reality" was farmers were not getting paid for "producing the product".

"But against that, if you want the top-class people to work in your industry you have to compete with the likes of Ryanair and all these different companies who will chase the best brains and the best ability."

He said that near the end of his time at the Irish Dairy Board a consultancy firm recommended higher pay for executives.

Mr Cahill said that while the salaries were "huge", the performance of the executives was very good.

Fine Gael Kildare South TD Martin Heydon said: "There absolutely has to be transparency and where big payments are being made the examples need to be given of how that matches with industry norms."

Fianna Fáil agriculture spokesman Éamon Ó Cuív said the issue of executive salaries at Ornua "raises a wider issue and that is the kind of money being paid to top executives".

"The disparity between top and bottom wages has widened in the last 20/30 years dramatically in real terms and I think it's most unsatisfactory," he said.

Irish Independent

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