Coveney forces horse racing chief to pay back €37,550 in 'disallowed' bonuses
Published 21/08/2011 | 05:00
The CEO of Horse Racing Ireland, Brian Kavanagh, has agreed to pay back the bonus awarded to him by his board, after he spoke to an "unhappy" agriculture minister Simon Coveney yesterday.
Speaking to this newspaper last night, Mr Coveney has said that the bonuses, relating to 2008 and 2009 totalling €37,550, are to be paid back "immediately" and that no bonuses are to be paid for 2010, 2011 or 2012.
HRI defied the Department of Agriculture and awarded the backdated bonuses. The decision to pay two bonuses came amid a standoff between the company and the department over the fact its chief executive, Mr Kavanagh, had failed to sign a new contract.
Mr Coveney said Mr Kavanagh had now agreed to sign a contract. "I made it clear to Mr Kavanagh and to Denis Brosnan, the HRI chairman, that I was deeply unhappy with the situation. In fairness, they have responded quickly and it is good news that he will now sign a contract."
It emerged yesterday that HRI went ahead with bonus payments of €37,550 to its chief executive just last month despite the opposition of both the previous and the current governments to such payments.
As a result, Mr Kavanagh's total bonus package for the two years was €122,000. In February 2010, Mr Kavanagh volunteered to have his salary cut by €15,000. But in February 2011, the board restored it and backdated the increase to offset a decision not to pay bonuses for 2010, 2011 and 2012.
Mr Coveney had said he was "very unhappy" with the contract situation and would take action if there was any breach of policy regarding performance awards.
In February 2010, Mr Kavanagh volunteered to have his salary cut by €15,000. But in February 2011, the board restored it, and backdated the increase to offset a decision not to pay bonuses for 2010, 2011 and 2012. "As [the non-payment of bonuses] represented a cut in income of more than €80k per annum, the board were not satisfied and instructed that the salary be reinstated," HRI told the department.
Yesterday Fianna Fail Finance spokesperson Michael McGrath said State boards which defied the Government on the payment of bonuses to chief executives should be sacked. "It is simply not acceptable to have State boards in place which are willing to blatantly disregard government policy on any issue, not to mention an issue as sensitive as bonus payments. If board members are unwilling to comply with clearly stated government policy, they are not fit to hold office," Mr McGrath said.