Report says board concerned more with its independent than with CEO’s pay level

CRC ‘stonewalled’ HSE on its pay enquires

Former chief executive Paul Kiely: the CRC interim administrator’s report  says the terms of an exit strategy put forward by Mr Kiely for his departure “were fully incorporated, without amendment, into the termination agreement” approved by the then board of the CRC. Photograph: Laura Hutton/Photocall Ireland

Former chief executive Paul Kiely: the CRC interim administrator’s report says the terms of an exit strategy put forward by Mr Kiely for his departure “were fully incorporated, without amendment, into the termination agreement” approved by the then board of the CRC. Photograph: Laura Hutton/Photocall Ireland

Fri, Jun 20, 2014, 01:00

The CRC interim administrator’s report strongly criticises the previous board of the CRC over its handling of the retirement of former chief executive Paul Kiely and the appointment of his successor Brian Conlan.

The report says the terms of an exit strategy put forward by Mr Kiely for his departure “were fully incorporated, without amendment, into the termination agreement” approved by the then board of the CRC.

This included his proposal for a confidentiality clause on the deal.

Mr Kiely received a total retirement package worth nearly €750,000 as part of this agreement.

The report says under the exit strategy, Mr Kiely would end his employment with the CRC and a new chief executive would be recruited at about 50 per cent of the cost but with the same range of duties.

Benefit of savings

“The existing CEO [Mr Kiely] would receive the benefit by way of direct and indirect payments of the bulk of the savings made, and a relatively small balance in savings flowing to the CRC.”

The report says that from an employer’s point of view, the salary that formed the basis for pension and other calculations was “overstated” and that this had been brought to the attention of the pension administrator.

However it says the legal advice was that it was not possible in the current circumstances for the CRC to revisit the pension calculations already in train.

“The available evidence points to the CRC board being more concerned about the company’s independence and the attention that revealing the level of the CEO’s remuneration would attract rather than the level of remuneration itself,” it says.

The CRC had “stonewalled” requests by the HSE, starting in 2009, for information on the chief executive’s salary, while media inquiries were also rebuffed.

Serious governance issue

“There is no doubt that the level of the CEO’s remuneration, in the light of the previous correspondence and discussion with the HSE and general hardening of public pay policy in a time of austerity, represented the most serious governance issue to be faced by the CRC’s board of governors and, yet, they chose not to inform the HSE of the proposed retirement package.”

The report says that to add fuel to the fire of HSE discontent and further sour the relationship with its main funder, “the board of the CRC in the undoubted knowledge of the commitments given [previously] to the HSE proceeded to offer, without the prior approval of the HSE, the CEO position to a former board member [who retired from the board only to allow his name to be considered for the position of chief executive]”.