Sunday 25 February 2018

No second yachts for top Irish bosses as pay snips cut wealth

The tradititionally generous wage packages of Ireland's top execs have had a bit of a trim, writes Nick Webb

Ireland's top executives were paid less last year than at anytime over the past four years, despite surging share prices. The top 10 highest paid executives of listed Irish companies shared €46m in 2009, compared with a whopping €93m a year earlier.

However, those figures were skewed by a vast €48m pay-out to Aidan Heavey and his fellow executives at Tullow. In 2007, the top 10 executives landed pay packages of €66m, with a combined remuneration of €52m a year earlier.

Aryzta boss Owen Killian was the highest earner according to the latest annual reports from Ireland's largest stock market companies. His €10.2m deal was almost double that of the next highest paid executive, Tullow's Aidan Heavey on €5.98m. Killian's package was worth almost €29,000 per day.

Few of the top executives of the top companies received basic salaries of over €1m. But their earnings were massively enhanced by bonus schemes, pension payments and benefits in kind, which ranged from company cars to tax planning advice. The true scale of these packages was buried in the small print of annual reports -- including conditional share awards which are triggered by profit growth or other targets.

Last year, the Sunday Independent revealed the scale of Tullow Oil boss Aidan Heavey's extraordinary pay packet. The former Aer Lingus financial controller turned oil man earned €34m. This was largely through massive share awards and exercising and selling stock options. Other reports had centred on his salary of €1.84m, missing the scale of his full pay deal.

The Lambourghini-driving Heavey, whose wife recorded an Irish Top 10 single in the early 1980s, pocketed just €5.98m in 2009. The bulk of his package was made up of nearly €2.4m in shares, given to him for having hit targets under a bonus scheme. He was awarded a further €1.73m in shares that may vest if he hits certain targets. On top of this, Heavey earned a pay pot of €1.89m made up of salary, bonuses, pension payments and various benefits.

Heavey's fellow executives, including his number two Graham Martin and Paul McDade, also made a fortune out of the oil company, landing pay packers worth €3.42m and €3.36m respectively. The majority of these packages were made up of shares vesting and other shares being awarded under company bonus schemes.

Paddy Power chief executive Patrick Kennedy earned up to €4.69m in 2009, capping an extraordinary year in which he was named Sunday Independent chief executive and deal maker of the year, while Paddy Power landed the company of the year gong after a major poll of UK and Irish analysts. Kennedy's basic salary, pension and bonus package of €1.42m was massively bulked up by a €2.2m conditional share award and a further €1.07m worth of shares coming good under a bonus scheme. Kennedy's right-hand man, Breon Corcoran, picked up close to €3.52m, which was inflated by conditional share awards. The fourth biggest pay packet went to Irish Life & Permanent's Denis Casey, who trousered a huge €4.574m deal, despite resigning early last year when revelations emerged over the deposits scandal involving IL&P and Anglo Irish Bank. Late last year, IL&P told the Sunday Independent in no uncertain terms that Casey was not going to receive a big pay-off.

Casey's big pay-off was made up of almost €1.25m in lieu of notice as well as a stonking €2.93m relating to the technical transfer value of his pension. One would be only too terrified to wonder what IL&P would consider a big pay-off.

Ireland's biggest company, the €15bn cement and rocks behemoth CRH, paid its chief executive Myles Lee a €4.08m package -- far more than the €2.455m reported earlier this month. His basic package of salary, pension, benefits and cash bonus was €2.455m, however, he was also given a conditional award of shares worth €1.32m. A CRH bonus scheme also chipped in with €313,000 in shares that vested this year. We haven't included €1.54m in stock options awarded to Lee last year as the exercise price is below CRH's current share price. They may become hugely valuable in the future.

Mark Towe, CRH's man in America (traditionally the springboard to the CEO's office) was also well rewarded, landing a €3.59m deal, made up of €382,000 in gains from exercising options, as well as conditional share awards and a €1.43m salary, pension and bonus package.

Kerry Group's Stan McCarthy's basic package rose from €1.525m to €1.751m last year. However, this rose considerably when nearly €1.2m in conditional stock awards and the vesting of other shares was included, bringing McCarthy in just shy of €3m.

Other big earners among Ireland's largest public companies include Smurfit Kappa's Gary McGann, who picked up a basic deal worth €2.23m . He was awarded 96,200 special shares, which have gained nearly €263,000 based on current prices. McGann was also paid €142,000 for his other non-executive posts.

DCC's Tommy Breen, who netted just over €2.11m, was also awarded 20,000 stock options, which have risen in value by over €160,000. Elan's Kelly Martin traditionally lands a mega options-filled pay packet but last year's was an extremely modest affair by Elan standards. Martin's basic pay doubled from €612,000 to €1.23m but the 150,000 share options he was awarded rose by just over €98,000.

Kingspan's Gene Murtagh kept his core salary deal unchanged at €756,000. It was boosted by the award of 148,000 shares worth about €407,000. Now they are worth over €1.06m. Kingspan Finance chief Dermot Mulvihill saw his package hit €2.6m, largely through a €1.4m pension top up.

Bank of Ireland's annual report comes out earlier than other major companies because of its year end. It's harder to compare its remuneration packages because they related to a far earlier period. The then-chief executive Brian Goggin earned €3.09m, with new boss Richie Boucher bagging €1.06m.

Greencore's Pat Coveney and Fyffes David McCann also earned more than €1m.

Sunday Independent

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