Friday 23 June 2017

Public sector pay levels are gigantic by any standard

New Government is 'shocked' at salaries, but unlikely to cut them

Daniel McConnell, CHIEF REPORTER

Those at the top of Ireland's public sector are not only well paid by international standards -- they are phenomenally well paid.

British PM David Cameron recently said his public sector was run by fat cats -- and the top earner (John Fingleton - head of the Office of Fair Trading) was paid £259,000 (€294,000) in 2010.

"By that standard, if the UK public sector is full of 'fat cats', then the Irish public sector is full of 'morbidly obese cats,'" wrote one aghast UK journalist a few weeks back as Britain prepared to grant Ireland a bilateral loan.

The British simply cannot fathom how so many in a bankrupt country of just four million people are earning such huge salary packages, even after the arrival of the IMF.

Their disbelief is entirely justified.

Despite an announcement on budget day last December by the then Finance Minister Brian Lenihan that salary levels in the public sector would be capped at €250,000, it emerged recently that an elite group of 28 semi-state chiefs, state-agency bosses and judges are still earning more than €250,000 each.

They include High Court judges and chief executives at the Health Service Executive (HSE), the ESB and the National Roads Authority.

An examination by the Sunday Independent has revealed that 66 public servants earned more than the Taoiseach in 2010, while 200 earned above €200,000, including hospital consultants and top academics.

It's time this farce stopped once and for all. Surely it is possible to say that no one, no matter how much they have been paid up to now, will be paid more than the Taoiseach Enda Kenny, who does well on €228,000.

Last week, the public reacted with horror and disgust at the revelation of ex-AIB head Colm Doherty's €3m golden handshake, despite the bank's thirst for more than €13.3bn of taxpayers' money.

That deal was agreed by the board of AIB, who were told by Lenihan to pay him what he was entitled to.

Among those on the board of AIB who signed off on the deal was one of the two public-interest directors, Declan Collier, the CEO of the Dublin Airport Authority.

Collier probably has some sympathy with Doherty, given his own remarkable and downright scandalous salary since he became the boss at one of the country's monopolised basket cases.

Between 2005 and 2009, Collier, a state employee in charge of an inefficient monolith, was paid an incredible €3m in salary and benefits. Even when the company posted a €13m loss in 2009, he was still paid a performance bonus.

When asked why, the company said: "The performance-related element of the chief executive's salary is governed by a range of long-term and short-term criteria that are set by the board remuneration committee and the performance of the chief executive was measured against those criteria."

Nonsense.

His pay in 2010 has not yet been revealed, but the company managed to squeak through a profit, so we can expect another whopping pay-out to Collier to be revealed.

Padraig McManus, the ESB chief, has repeatedly topped the list of semi-state bosses' salaries, with packages in excess of €750,000 -- or €62,500 a month. But McManus is in good company.

As revealed in the McCarthy Report, the average pay in the ESB is an incredible €94,300, yet energy costs in Ireland remain among the highest in Europe.

Then there is John Mullins, the CEO at Bord Gais. While not in the McManus league of excess, his pay is still exceptional. In 2010, he received a salary of €265,000, plus a bonus of €50,000. He also received €74,000 in added pension, health and car benefits, bringing his annual package total to €389,000.

Let's not forget our dear friends down at the National Treasury Management Agency. For years, they sought to keep their salaries secret, and with good reason.

CEO John Corrigan is being paid a basic salary of €490,000 and is entitled to a bonus of 80 per cent of salary, giving him a package worth in excess of €1m when his pension is considered.

Such is the excess down there that even the pensions are staggering.

His predecessor, Michael Somers, confirmed to this newspaper last year his annual state pension of €265,000.

Nama boss Brendan McDonagh is not far behind Corrigan on his salary of €430,000. He too is entitled to a bonus of 60 per cent of salary, and once his pension and other benefits are taken in, his package is worth in excess of €840,000.

Donal Connell, the top man in An Post, is another who receives a salary far in excess of the Taoiseach's salary.

Despite the company's €25.6m loss in 2009, Connell was paid a package of €500,000. This compares to the £154,999 (€176,000) paid to his UK Royal Mail counterpart.

New HSE boss Cathal Magee's salary also beggars belief. His counterpart in the NHS in Britain, David Nicolson is paid £255,000 (€289,250), while Magee's basic salary is €322,000. When add-ons are factored in, his package tops €360,000.

In academia, things are not much better. The seven presidents of our indebted universities are all in receipt of salaries in excess of €210,000, with UCC president Michael Murphy topping the pile on €232,000, plus extras.

Prof Des Fitzgerald, who is only a vice-president in UCD, has an "extraordinary" package of €495,000 -- 15 times the average salary.

Then there was the revelation of the €225,000 salary paid to concert pianist John O'Connor for a part-time positions as director and teacher at the Royal Irish Academy of Music.

VHI boss Jimmy Tolan was paid €412,000 in 2009 -- VHI refused to disclose details of his 2010 salary.

Another salary which has repeatedly baffled people is the €417,000 basic wage paid to Coillte boss David Gunning. Against the wishes of then Agriculture Minister Brendan Smyth, Gunning received a bonus of €56,000 last year.

The Chief Justice John L Murray is the highest-paid member of the judiciary, taking home a salary of €295,000 in 2009. This is on top of his pension, which he already receives from his time as Attorney General.

Even our top civil servants are paid substantially more than their UK counterparts. Sir Nicholas Macpherson, the permanent Treasury Secretary, was paid £175,000 (€198,000) last year. Kevin Cardiff, the Secretary General in the Department of Finance was paid €228,446.

New RTE director-general Noel Curran not only has to contend with huge losses and inefficiencies at the state broadcaster, he has had to accept the salary cap of €250,000.

The new Government has spoken of its shock at the level of pay to some of Ireland's public servants.

I'll be shocked if they manage to do anything about it.

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