No more 'easy' bonuses for semi-state bosses, says Varadkar
Varadkar told board to consider positions
Published 27/06/2011 | 05:00
Transport minister Leo Varadkar has said that the criteria for bonuses to be paid to semi-state bosses are to be reviewed.
Speaking on Morning Ireland, Varakar said a new system will be introduced "based on different criteria" adding that "in the past it has been a little bit too easy to get a bonus.
"There is a case for performance-related pay but I think the criteria are going to be much stricter."
Varadkar's comments came after the chief executive of the Dublin Airport Authority, Declan Collier, announced that he would forego a bonus of €106,000 in respect of 2010.
Dublin Airport Authority (DAA) chief Declan Collier surrendered his controversial €106,000 bonus after Transport Minister Leo Varadkar gave him a deadline of last night to settle the issue.
Mr Collier said he would give up the massive payment after a weekend of public uproar and unprecedented pressure from the Government.
The embattled boss made the decision following a number of crunch DAA board meetings over the weekend.
It means Mr Varadkar and the Government have faced down the first test of their policy to drive down wage levels across the semi-state sector.
The DAA board is expected to make a statement later today outlining its position, after Mr Varadkar and Finance Minister Michael Noonan told the members to consider their positions.
Although Mr Collier refused to comment at his home in Ranelagh, Dublin, yesterday, a statement from the DAA said he had given up the payment "in light of prevailing economic circumstances".
If Mr Collier chooses to stay on when his current contract lapses next year, he will be subject to a salary cap of €220,000.
The statement said: "The board of DAA had approved a performance-related payment in respect of 2010 to Mr Collier based on the achievement, as per his contract, of rigorous performance-related targets that year.
"In light of prevailing national economic circumstances, the board and Mr Collier had agreed to defer payment until the termination of his contract."
The bonus, awarded in open defiance of government policy and originally supposed to be deferred until Mr Collier stepped down from his position in 2012, caused uproar when it was revealed on Friday.
Before he gave up the bonus, Mr Collier's 2010 package totalled €612,500. This included a basic salary of €308,000; the €106,000 in deferred bonuses; a further €182,000, which included pension contributions and taxable benefits; and director's fees of nearly €16,000. The total package was nearly 8pc more than he got in 2009.
Mr Varadkar told former DAA chairman David Dilger last month the bonus was not to be paid, in line with government policy on all semi-states.
Once the bonus issue became public, Mr Varadkar demanded Mr Collier voluntarily give it up or that the board ask for it back. He wrote to the board on the matter and members held at least two teleconference board meetings over the weekend.
Matters escalated as the minister also threatened not to reappoint members of the board where their contracts lapsed at the end of the year.
Sources said Mr Varadkar also let it be known through intermediaries that he was appearing on RTE's 'The Week in Politics' last night and wanted the matter settled before then, although Mr Varadkar said he issued no ultimatum.
"I welcome the decision by Declan Collier to forgo his bonus for 2010 and his acceptance that the terms and conditions of the ceo's position will be substantially reduced next year, in line with Minister Howlin's reforms," the Dublin West TD said.
"I am pleased that Mr Collier and the DAA board are now complying with the policy of my department, and of the Government as a whole.
"Like all sections of society and the economy, the semi-state sector will have to undergo a significant transformation in order to survive and prosper. That requires leadership and personal sacrifice from the top."
The DAA move came just days after Public Expenditure and Reform Minister Brendan Howlin announced salary caps for newly recruited senior civil servants, judges and semi-state chief executives. He appealed to existing semi-state bosses, such as Mr Collier, to take a 15pc voluntary pay cut to demonstrate "solidarity".
Finance Minister Michael Noonan yesterday also played a role in ratcheting up the pressure on the DAA board over the massive bonus. "All senior people in public service will have to be subject to pay caps. We're all in this together and the moral leadership has to be given by the people in the top jobs in the public service," Mr Noonan said.
"It's a pity that Declan Collier and the board of the Dublin Airport Authority broke from what the consensus was across the public service."
In comments made before the announcement that Mr Collier would give up the bonus, Mr Noonan also challenged the board directly.
"The Irish taxpayer is the 100pc shareholder in the DAA."
He added: "If the directors cannot agree with the view of the shareholder, and the shareholder is represented by the minister, I'd ask the question: What are they doing staying on?"