Varadkar fury over €106,000 bonus for DAA boss
But minister admits he's powerless to halt payment
TRANSPORT Minister Leo Varadkar last night demanded that the Dublin Airport Authority withdraw a planned €106,000 bonus for its chief executive.
But Mr Varadkar admitted that he was legally powerless to force either the DAA board or its chief Declan Collier to give up the payment.
The DAA awarded the bonus -- which is deferred until Mr Collier eventually leaves the semi-state -- in open defiance of the Government. The payment, revealed in the DAA's annual report, has undermined attempts to cap the lucrative salaries of semi-state chiefs.
Mr Collier's 2010 package totalled €612,500. This included a basic salary of €308,000; the €106,000 in deferred bonuses; a further €182,000, which included pension contributions and taxable benefits, and director's fees of nearly €16,000. The total package was nearly 8pc more than he got in 2009.
Mr Collier took a voluntary 12pc pay cut last year after agreeing to an 8pc pay cut in 2009.
However, his basic salary last year was still only 7.5pc -- or €25,000 -- lower than it had been when the country's airline-passenger traffic reached its all-time peak in 2007.
Mr Varadkar has written to the board, outlining his position. The DAA would not comment last night on Government demands to withhold the €106,000 payment.
Mr Collier could not be contacted and the DAA said he was travelling on business.
The DAA, which controls Dublin, Cork and Shannon airports, said that unlike in previous years, the latest payments would not be handed over to Mr Collier until he left the semi-state. But it insisted that they would be paid.
Mr Varadkar instructed the DAA just weeks ago that the latest bonus was not to be paid. However, sources acknowledged that the minister was legally powerless to do anything about it.
"I made my position to the chair of the DAA very clear a number of weeks ago -- that this bonus was not to be paid," Mr Varadkar said.
"The board was very clear that the government position was that this bonus was not to be paid.
"And we mean not paid -- not reduced, not deferred -- not paid at all."
He said all government agencies were expected not to make performance-related payments in respect of 2010.
The DAA move came just days after Public Expenditure Minister Brendan Howlin announced salary caps for newly recruited senior civil servants, judges and semi-state chief executives.
He appealed to existing semi-state bosses, such as Mr Collier, to take a 15pc voluntary pay cut to demonstrate "solidarity".
It is understood that the Government was hoping the publication of the new salary caps would increase the pressure on the current post-holders, whose wages are legally protected in their employment contracts.
As Mr Collier's bonus payment threatened to undermine this approach, Mr Howlin's spokeswoman said he "strongly supported" the view of Mr Varadkar on this issue.
She added: "The minister has set out his intention to initiate a review of the current system of performance-related award schemes for CEOs of commercial state companies. In the interim, boards have been requested not to pay bonuses."
Mr Collier was awarded the bonuses for 2010 -- a time when total passenger traffic at the country's three main airports collapsed and the nation teetered on the financial brink.
He is thought to have been awarded the two separate payments of €64,800 and €41,300 for successfully cutting costs and ensuring that the new Terminal 2 at Dublin opened on time last November.
Stripping out one-off costs related to redundancies and reorganisation incurred by the DAA in 2009, the semi-state's profit actually fell last year from €38m to €33m.
Mr Collier is also a government-appointed public-interest director at Allied Irish Banks -- a position for which he was paid €40,000 last year and €29,000 in 2009.
It is believed that the DAA board felt it was contractually obliged to set aside the bonus payments for Mr Collier -- but the CEO himself still had the option of waiving them.
By the end of 2010, Mr Collier had been paid a total of more than €3.5m by the DAA since taking over as chief executive of the semi-state in April 2005.