Delaney takes a pay cut but still is earning more than presdient of USA and Taoiseach
Published 01/12/2010 | 05:00
HOW did the position of chief executive in a relatively small football association become more lucrative than the office of Taoiseach, the American presidency, and a variety of larger sporting organisations?
That's the question which lingers after John Delaney confirmed that he would be taking a substantial cut in his €430,000-a-year package.
"We are in different times now, and I am very happy to take a significant reduction in it," he said yesterday at the launch of the 2011 Europa League final, which was overshadowed by Irish soccer's domestic issues
"It is something I thought about myself and at some future date I will let the members of the association know and then the public."
There remains a curiosity about how the terms of his arrangement reached such exorbitant levels.
The Waterford man's salary is in the spotlight again after a week where the FAI announced personnel cutbacks, with 12 people made redundant last Wednesday and the departure of technical director Packie Bonner confirmed on Friday.
With commercial director Rory Smyth also on the way out, and finance director Mark O'Leary leaving his post in September, the association has been forced to shed both executive staff in key departments, and regional development officers tasked with promoting the game.
The association spent over €14.9m on staff in 2009, an increase from €13.5m in 2008. That figure is made up of wages plus social welfare costs and pension costs; 197 people were employed by the FAI in 2009 and 183 were on the payroll before last week's redundancies.
With interest kicking in on the substantial loans to fund the commitments towards the Aviva Stadium -- conservative estimates put the level of borrowing in the region of €50-60m -- then further cost-cutting measures are likely in the next 12 months, although Delaney is banking on a prudent business plan that factors in reduced ticket prices for international games.
For all his references to the IMF yesterday, the bigger picture in the FAI is the unfortunate consequence of the disastrous pricing of 10-year tickets for the renovated stadium, with the FAI failing to realise the impact of the recession by ploughing on with a ridiculous pricing strategy in an attempt to produce the cash for repayments.
Those in Abbotstown who avoided the cull and earn more than €40,000 a year were hit with a 5pc pay-cut on the day that the government's austerity measures dug into everyone's pocket.
Delaney addressed the workforce and announced he would be taking more than a 5pc chop on his €430,000 wedge, which is believed to include some benefits, and a pension contribution. The 5pc cut would represent a €21,500 reduction, so a larger figure would likely bring his wages under the €400,000 mark.
It's understood that it would represent his second cut in the space of a year, as the €430,000 was a revised wage when he 'accepted a request' from the FAI board to extend his contract in July.
Some will sympathise with an individual who takes a drop in pay twice in a short space of time. Others will ask how the role skyrocketed in terms of value in the first place.
Back in 1996, when Sean Connolly was ousted as general secretary, the most senior administrative position in the organisation at the time, he was believed to be earning around €63,500.
The salary of his replacement, Bernard O'Byrne, crept up to €127,000 until his departure in 2001. Brendan Menton was then appointed, and commanded close to €150,000 a year, and Kevin Fahy had an interim stint on similar terms to Menton.
The figures jumped to another level in the wake of the Saipan controversy in 2002. With the Genesis Report commissioned to examine the build-up to those tumultuous events, the association broadened its search for a new supremo.
They turned to Fran Rooney and, with the position now titled as chief executive, they prepared to pay the market rate in boom time.
Negotiations with Rooney produced a basic figure of €250,000, although he asked for more in bonuses. He was prepared to introduce a range of initiatives, effectively built around generating fresh income, which would enhance his deal if successful. Delaney, then honorary treasurer, was an ally of Rooney at the time, yet the Dubliner ended up with the original quarter of a million package.
A year later, the pair had fallen out, and Rooney was on his way. Delaney was asked by the board to temporarily step in and did so on the same terms.
His appointment was confirmed in March 2005 and, in November 2006, the FAI announced that his tenure was to be extended until 2012. What they didn't mention was that in the space of two years, he had been awarded a substantial six-figure pay rise.
The board of management sign off on the big decisions. It is unclear who they benchmarked against. "Very few of the board members would have real corporate experience," says one FAI source. "They wouldn't know what the going rate is."
When Delaney was asked last night if there was any benchmarking, he batted away the question. "I'm not going into that," he replied. "I was offered a contract by the association and the salary was a salary that they have offered me and paid me."
With Delaney, presumably, sitting out those discussions, then the remaining nine who make the financial call are drawn from the various representative strands of the game.
The cast of characters has been consistent throughout the Delaney era; the only change of note in the last couple of years came when David Blood's term as president ended at the August AGM, with Tony Fitzgerald entering as vice-president to mark Paddy McCaul's promotion to replace Blood.
It appears that League of Ireland chairman Eamonn Naughton will be challenged by vice chairperson Caroline Rhatigan this week, a development which would be interesting considering she would be outside Delaney's established circle of allies.
Of course, many within the game are loyal to a CEO who has won many admirers at grassroots level for his immense work-rate. Even his critics admit that his ability to get out and about and press the flesh is a massive strength. "He lives and breathes FAI," says one current employee. His salary increased in tandem with FAI staff levels, which were marginally over 50 when he was appointed, a growth that has ultimately proved to be unsustainable.
Bonner's deal was worth over €200,000 per annum and high performance director Wim Koevermans is on a higher wage.
Middle management were being recruited on €150,000-a-year contracts. With executive staff gradually being shown the door, the disparity between the earnings of the man at the top and the rank and file is substantial; and that's without even getting into the business of Giovanni Trapattoni's pay packet.
Aside from Bonner, it was comparatively lowly paid staff that received bad news last week and the ones who survived are unsure what might follow when their contracts expire. A portion of staff, such as community development officers, are co-funded in conjunction with local county councils. There's no guarantee that funding will continue, with a bruising Budget to come.
The burning issue is whether maintaining the lofty wages of the select few has cost people their jobs.
Delaney will bristle at such suggestions. The default response to criticism is that certain journalists are pursuing agendas by asking questions. It is a line of attack which suggests that people are trying to invent a crisis which doesn't exist.
After all, the delegates at this year's AGM happily sat through events without seeking clarification on anything, with the only contributions from the floor nothing more than pseudo love letters aimed in the direction of the podium. On reflection, it seems even more incredible.
Will the football family remain united in their siege mentality after some popular members were ushered towards the exit? You have to wonder.
The FAI party line at the moment is that their association is subject to far more scrutiny than their counterparts in testing times. With well-placed sources insisting that further cuts are inevitable, it is spin that could rebound on the hierarchy.
Why did the FAI adopt a pay scale for a handful of leading staff on another stratosphere to other sporting organisations on this island? How did they suddenly become so different?
Only the board of management can reveal the answer.