'Money doesn't grow on trees in Germany'
Gemma O'Doherty speaks to a Bonn-based forestry guru, who was very surprised to learn how much Coillte's chief executive earns
Forest
As the boss of Sweden's largest forestry company, Per Olaf Wedin manages 4.3 million hectares of prime Scandinavian woodland. His firm Sveaskog is the fourth biggest forestry owner in Europe, so you'd expect him to earn a pretty krona or two. And he does.
Mr Wedin's annual salary comes in at around €250,000 with extra top-ups of about €200,000 in pension and other perks. With its public finances in rock-solid shape and economic growth among the fastest in Europe, Sweden can well afford to pay its top CEOs fat-cat salaries.
Yet his counterpart in bankrupt Ireland, a country with a minuscule timber industry relative to Sweden's, is virtually on a par with him when it comes to pay.
Last year, David Gunning, head of the state-owned forestry body Coillte, earned an overall package worth €473,000, yet he has responsibility for just 445,000 hectares of land.
"It sounds a bit high," says Mr Wedin. "Lucky him. I had no idea such an amount could be paid in a country like Ireland."
But David Gunning is probably feeling anything but lucky right now. After a very public humiliation which culminated last Saturday with the Taoiseach reprimanding him over his failure to take a pay cut, the forestry chief finally bowed to the inevitable.
On Monday, he agreed to waive 15pc of his €297,000 annual salary and accept a pay cut of almost €45,000 to bring him in line with other commercial state chief executives.
In June, Minister for Public Expenditure and Reform, Brendan Howlin, asked the heads of semi-state bodies on salaries of more than €250,000 to volunteer a pay cut of at least 15pc. The bosses of An Post, the National Roads Authority, Bord na Móna, the Irish Aviation Authority, ESB, Iarnród Eireann and the Dublin Airport Authority all agreed to the cut.
But until this week, the former army officer forestry head was the only one of eight chief executives holding on to his lucrative package.
This week Coillte denied that its CEO had refused to take the voluntary cut, claiming it was simply that no decision had been made on the matter since the summer request. But it's not the first time Mr Gunning has stuck to his guns at the threat of losing his perks.
During his tenure in the previous administration, former Agriculture Minister Brendan Smith had a two-year stand-off with the forestry agency after it defied a request by his department to give up a €56,000 bonus paid to Mr Gunning.
Minister Smith wrote a letter to the Coillte chairman Brendan McKenna stating that "at a time when it has proven necessary to impose cuts in wages and social welfare allowances and to increase taxes at all levels, it seems inconceivable that a bonus would be paid to a person earning in excess of €400,000 a year."
But the politically-appointed board dismissed the request, claiming it was not its job "to take into account populist views" and that "it would be immoral not to pay" the bonus.
This week Mr Gunning was unavailable for interviews, buried under a forest of paperwork at his office in Newtownmountkennedy, Co Wicklow, in the run-up to the busy Christmas season.
The 51-year-old, who started his business career with computer giant Hewlett Packard having spent a decade in the Defence Forces, is very proud of his stewardship of the state forestry board.
Last year profits at the semi-state, which has been recommended for sale in the McCarthy report, rose from €4.2m in 2009 to €32.1m, on the back of strong exports to the UK construction sector and rising timber prices due to growing demand from Asia.
Coillte has also become a major player in the renewable energy business, although not everybody is overjoyed at the increasing sight of giant wind turbines hovering over the treetops, and the agency has faced growing resistance to wind farm projects from local communities living beneath them.
Some see the rush to make cash out of Irish forests as environmental vandalism, among them the British newspaper the Guardian who launched a scathing attack on the state forest body when it said it had "impacted on many a wild Irish bog, mountain and wetland by planting in the last few years more than a million acres of pesticide-laden, monocultural and exotic Sitka spruce plantations".
This week, news of Mr Gunning's salary controversy was greeted with surprise in Germany, where wages in state bodies are considerably lower than in Ireland.
"In Germany, money doesn't grow on trees," says Matthias Schwoerer, head of European and international forest policy in the country's Federal Ministry for Agriculture.
"Forestry isn't a get-rich-quick business here. The maximum you could earn here is up to €150,000. It is inconceivable that somebody could earn almost half a million euros but then again, here in Germany, we keep hearing messages about these big salaries you get in Ireland."
ESRI economist Professor Richard Tol, who specialises in environmental issues, argues that Irish bosses of semi-state boards would be in for a shock if they looked for work abroad.
"Nobody can blame David Gunning for playing within the rules and taking a salary that is part of his contract. He hasn't done anything illegal.
"But it is still an obscene amount of money to pay somebody who is just a middle-manager.
"His job title may be CEO but Coillte is a middle-sized company with 1,100 staff. His role isn't exactly high stress and doesn't require any particular level of skill.
"It's not a very challenging job and nothing exciting ever really happens at Coillte unless they have a big storm and all their trees blow down.
"Irish semi-state companies might be large in Ireland but they are very small in a European context. It is very unusual that a chief executive of a company this size would earn such an amount of money. You could easily get as good a manager for probably half the price.
"RTÉ is another example of this. If you look at the size of the salaries in RTÉ, they are comparable to the BBC, a country with 62 million people. Ireland is the size of the state of Ohio and we should be paying our TV stars the same wages as they earn there."
The Dutch academic, who has a passion for the great outdoors, has been unimpressed by the quality of Irish forests since moving here.
"From my casual observations, when you go into a Coillte forest, they are usually a bit of a mess compared to the forests you get in Germany or Britain. The paths are not well-maintained. Sign-posting is a problem and parking is a mess. In my opinion, they don't exactly do a great job."
Originally published in
