Ex-ESB chief Padraig McManus gets €800,000 package
Published 28/01/2012 | 05:00
FORMER ESB boss Padraig McManus is getting a retirement package worth up to an estimated €800,000 this year -- and he will also be entitled to cut-price electricity.
Mr McManus (60) will enjoy the controversial perk despite getting an exit package which includes a lump sum of almost €600,000 and a pension of €200,000 a year.
Pension experts said his severance entitlements may be among the highest ever paid in the state sector.
The former energy chief, who was the highest paid semi-state worker, retired before Christmas after 38 years at the utility company, not long after electricity prices shot up by 12pc.
A party was held in the Cellar Bar at the five-star Merrion Hotel in Dublin just over a week ago on Thursday to mark his retirement and former ministers Noel Dempsey and Eamon Ryan were among the guests. A presentation was made to Mr McManus, whose salary was more than €400,000 a year, at ESB head office earlier on the same day.
State-owned ESB refused to comment on Mr McManus's exit deal or confirm whether his pension was based on his salary before or after the Government asked him to take a 15pc pay cut.
"Padraig's retirement is a personal matter," said a spokesman. "We do not comment."
Mr McManus was not available for comment when the Irish Independent twice called to his home in recent days.
Sources say his deal may even have topped the €713,000 package paid to retired senior public servant, Dermot McCarthy, which caused political outrage last year.
The latest figures show Mr McManus’s basic salary was €420,993 in 2010, following a voluntary pay cut of 10pc in April 2009.
It is understood he took another 5pc pay cut last year, after the Government urged commercial semi-state bosses to take a 15pc wage reduction. Based on figures from the latest ESB annual report, pension experts said he would be entitled to a package worth almost €800,000.
Using the latest salary figure available for Mr McManus, pension experts calculated he was entitled to an annual pension worth €199,971 and a lump sum of €599,915.
A total of €200,000 of the lump sum is tax-free but he would have to pay tax on the remainder.
Financial advisers Eighty20 Focus said a €200,000 lump sum may actually “underestimate” the annual pension, as Mr McManus had 38 years’ service. It is understood there is a special provision in the ESB pension scheme that allows workers to get years of service added to their pensions if they were headhunted because they had specialist qualifications.
But the ESB would not clarify if Mr McManus was entitled to this or whether he waived any element of his payout. Meanwhile, his successor Pat O’Doherty is the first to be hit by a new government limit of €318,083 on the starting salaries of ESB chief executives.
Sources added that Mr McManus also qualifies for a discount on his electricity bill given to retired and existing staff. It is estimated that the perk is worth up to €470 a year to each of the 7,000 retired ESB workers.
Under the scheme, they qualify for 55pc off a maximum of 1,000 units of electricity for each bi-monthly bill. “Like many other Irish and international businesses ESB operates a staff discount scheme,” an ESB spokesman said. “It has been in operation since 1981 and retired staff are eligible.”
When asked about commercial semi-state bosses’ pension arrangements, the Department of Communications, Energy and Natural Resources, indicated they can vary. “The situation is that this is negotiated on a caseby- case basis.”
Mr McManus’s total remuneration in 2010, when benefits including pension contributions and fees are counted in, was €528,886, although he did not get bonuses that year. In 2009, when he got an annual bonus and long-term incentive payments, his pay amounted to €752,568.
Mr McManus was appointed chief executive and a member of the ESB board in July 2002. Sources say pension rules for bosses at the commercial semistates were brought in over 10 years ago that meant they could move on to private schemes when they agreed their contract.
If this was the case, Mr McManus’s annual pension would be €152,609 and lump sum €457,829, but the value of the private scheme would have to be added to this.
However, the latest ESB annual report says the company was paying a pension contribution worth 16pc of his salary – or €69,043 – which suggests he was on the ESB scheme until retirement.