DAA chairman eyes pay breach to lure new CEO
Call for improved package as profits jump 75pc to €108m
The chairman of the DAA, the semi-State body which controls Dublin and Cork airports, has indicated he might seek permission to breach the government-imposed pay cap as it hunts for a new chief executive.
The cap - introduced in 2010 by then Finance Minister Brian Lenihan - means that no CEO at a semi-State firm can be paid an annual salary of more than €250,000. The DAA's outgoing chief executive, Kevin Toland, is paid that basic salary, but in 2016 also received pension and other taxable benefits totalling €149,000, bringing his total remuneration to €399,000.
"Clearly, the cap on pay is way below market," said chairman Padraig O'Riordain. He said that while the DAA doesn't necessarily need to compete with pay offered by big stock market-listed companies, CEO pay at the DAA should rise.
Declan Collier, a former DAA chief executive, was paid a total of £530,000 (€614,000) for his role as chief executive of London City Airport in 2015, which included a £31,000 pension contribution. London City Airport handled 4.3 million passengers that year, generated revenue of £106.7m (€122.8m) and posted a profit after tax of £25.1m (€29m).
Yesterday, the DAA reported that its revenue rose 17pc last year to a record €793m, while its profits after tax climbed 75pc to €108m, also a record. Dublin Airport handled 27.9 million passengers last year. The DAA will pay a €29m dividend this year to the State. It paid €18m last year.
Mr O'Riordain has previously argued for a review of the salary cap, but declined to say yesterday what he believed would be a CEO salary at the DAA which would be commensurate with the role. "I do think we need to get pay for chief executives up to a level that is in some way reasonable," he said. "It's something that really does have to change."
Read more: DAA 'on different level' now - Toland
He confirmed that he will see what the DAA can do in relation to the remuneration package it can offer a new chief executive, but until then will continue to abide by government guidelines. Mr Toland is leaving this year to become CEO of troubled baked goods giant Aryzta. Mr O'Riordain conceded that Mr Toland's pay is "a lot of money".
"The important thing to understand is that there is a market out there for top chief executives," he said. "For Ireland to say that we'll just ignore market conditions entirely in terms of what people are paid, is not very positive."
Mr Toland said it's also time that regulation of airport charges at Dublin Airport is revamped. The Commission for Aviation Regulation determines how much the DAA can levy in passenger charges, taking into account capital expenditure requirements. Mr Toland said he does not believe there should be any regulation, or at the very most, "light touch" regulation. He said the current framework continually puts the DAA "in a position of adversity with our customers every five years".