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Government plans to cut top bonus for semi-state CEOs

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Former ESB boss Padraig McManus. Pic: Mark Condren.

Former ESB boss Padraig McManus. Pic: Mark Condren.

Former ESB boss Padraig McManus. Pic: Mark Condren.

The Government has decided that the top bonus paid to chief executives at commercial semi-state companies - worth 35pc of their salaries - should be cut.

Its decision to reduce the percentage performance-related award (PRA) allowed in future draft schemes comes after the departments in charge of the biggest State companies recommended that the payments should fall.

Documents released under Freedom of Information legislation also reveal that many departments back a government proposal to include a contractual provision that would allow the Minister for Public Expenditure and Reform to suspend the operation of PRAs, without compensation.

The departments' views were sought as part of the latest government review of bonuses, following a series of high-profile awards to CEOs during the recession. This led to a ban on their payment.

They included bonus payments of almost €210,000 to former ESB boss Padraig McManus, a €50,900 bonus to former DAA chief executive Declan Collier, and a €16,858 bonus for the CEO of Cork Port Company, Brendan Keating.

The Government is continuing its ban on bonuses. The payments are also excluded from the employment contracts of CEOs that are newly appointed or have their contracts renewed.

But correspondence from the Department of Public Expenditure and Reform also reveals that the Government has decided any future draft PRAs presented to it for approval should incorporate "a lesser PRAs percentage amount than the previously operated 35pc maximum bonus arrangement".

A letter from department official Tom Clarke said the greater proportion of such a reduced bonus may be in respect of longer-term goals in companies with a "significant change agenda or capital investment programme", possibly payable at two or three-year intervals.

The letter, outlining the Government's approach, said a "one PRAs format fits all" may no longer apply in all of the commercial semi-states.

It was sent after the secretary generals of departments were asked for their opinions in 2013 on the operation of the PRA system. The Department of Agriculture, Food and the Marine, which has Coillte, the Irish National Stud, Horse Racing Ireland and Bord na gCon under its aegis, said the 35pc award should be re-evaluated "with a view to revising it downwards".

Irish Independent