Saturday 19 August 2017

Semi-state chiefs in line for bonuses despite ban

€4m payout shared by 670 DAA and Bord Gais bosses last year

Paul Melia, Allison Bray and Fiach Kelly

SEMI-state companies are still considering paying bonuses to their chief executives this year despite a government order to end them.

The boards of at least seven companies last night refused to rule out making the performance-related payments.

The development came as it emerged that the Dublin Airport Authority and Bord Gais had paid around €4m in bonuses to managers last year.

The Dublin Airport Authority said that €2.1m was paid in bonuses to managers in 2010, with 400 people getting an extra payment of around €5,290 each.

But the company pointed out that all staff took pay cuts last year of between 5pc and 12pc, while overall pay was down by 10pc.

Bord Gáis revealed it paid €1.9m in bonuses to managers last year, when 270 people received an average payment of €7,400.

A company spokesman said the performance related payments, which went back to 2001, reflected the increase in profits.

He pointed out that the overall company performance had improved and it had grown its customer base from 600,000 to 1 million last year.

The figures were confirmed just days after a public spat between the board of the Dublin Airport Authority (DAA) and Transport Minister Leo Varadkar over a €106,000 bonus payment awarded to its chief executive Declan Collier.

Mr Collier surrendered the payment on Sunday after a weekend of public outrage and unprecedented pressure from the Government.

But now it appears the Coalition is facing a series of standoffs on the controversial issue of bonuses.

The Irish Independent has learned that the heads of all semi-state companies and agencies had been warned by ministers earlier this year not to pay bonuses.

Last night Coillte, national grid operator Eirgrid, An Post, the Irish Aviation Authority, Bord na Mona, Bord Gais and the DAA all refused to state whether the payments would end.

It emerged, however, that our best paid semi-state boss, ESB chief executive Padraig McManus, has turned down any bonus payments for this year.

Coillte, whose chief executive David Gunning got a €56,000 bonus last December on top of his salary of €297,000, said it had still not decided if payments would be made this year.

An Post said its chief executive, Donal Connell, whose salary is €386,000, had not claimed a long-term bonus of €97,000 built up between 2006 and 2009, and would not get a bonus for 2010.

But it refused to rule out a payment for this year.

"The question of a bonus for 2011 does not arise until next year," a spokeswoman said.

Others which refused to say if the payments would be banned include Eirgrid, the Irish Aviation Authority, Bord na Mona, Bord Gais and the DAA.

Some refused to comment.

The previous government had told the semi-states not to pay bonuses as far back as 2009 -- an instruction that was widely ignored.

The warning was repeated by ministers in the new Government in face-to-face meetings when they took up office.

A major review of performance-related payments to semi-state bosses is now under way, and Coalition sources said any other companies who tried to award bonuses would get the same treatment as Mr Collier and the DAA.

CLIMBDOWN

Mr Collier's climbdown meant "a marker had been laid down and that is very significant", one said. "It does send a signal across the semi-state sector."

The review, being driven by Public Expenditure and Reform Minister Brendan Howlin, is examining if the way of awarding bonuses can be changed in the middle of a CEO's existing contract.

While the Government is insisting it cannot change salary rates mid-contract, it is seeing if it can change how performance related bonuses are awarded. This could involve taking responsibility for setting the bonus criteria away from semi-state boards and giving it to the minister.

"The review would consider whether it would be appropriate to amend the operation of the schemes and to provide for more direct input and oversight by ministers," a spokeswoman for Mr Howlin said.

Mr Howlin will write to his Cabinet colleagues on the issue in the coming days.

Taoiseach Enda Kenny yesterday said that bonuses should be surrendered voluntarily.

"It is high time that everybody who is exceptionally well paid should voluntarily give up bonuses in respect of jobs for which they are being already very well paid indeed," he said.

"I would like to see the chief executives of semi-state bodies understand the message clearly. Our people are in a challenging position, everybody from the highest paid needs to make their contribution and play their part in this."

The Government had considered introducing legislation to cut semi-state pay but was advised against it by the Attorney General. A review of the bonus system is now under way, and new procedures will set out in what circumstances performance payments should be awarded.

Finance Minister Michael Noonan said he was not aware of other companies lining up bonus payments.

"The Declan Collier situation became newsworthy because it was the exception," he said.

"There are always surprises in public life and we will wait and see, but as I understand it from Minister Howlin, everybody now understands the new rules and are abiding by them."

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