The VHI will be without a permanent chief executive for another year. The board is to recruit another consultant following the Government's decision to block a proposed pay package for the National Lottery's chief executive, Mr Ray Bates.
The health insurance company has now been without a permanent chief executive since October 1996. The VHI's chairman, Mr Derry Hussey, said yesterday it would clearly be better for the company if a full-time, committed chief executive was appointed rather than a consultant for 12 months.
It is understood the VHI board offered Mr Bates a remuneration package worth £150,000, plus potentially valuable bonuses, a company car and other perks. However, the Government rejected the proposal before Christmas because it exceeded existing Gleeson guidelines on public-sector pay. It has not yet implemented new guidelines, drawn up by a committee chaired by an AIB executive, Mr Michael Buckley.
Mr Hussey said he did not know when a chief executive would now be appointed. "One has to guess what will happen over the next 12 months, particularly in regard to the Buckley recommendations.
"Our belief is that to recruit a candidate of the right calibre we have to pay a package of a certain calibre," he said.
He said that he and the board "had put forward the candidate and the package in the best interests of the VHI, but the Government had difficulty, and essentially we had to accept that. We understand their difficulties just as they understand ours".
The VHI's acting chief executive, Mr Aidan Walsh, is expected to return to his position as a partner at accountants Price Waterhouse soon, after a year with the VHI.
Initially, his appointment was for six months but the contract was extended and was due to end last December.
Following the Government's refusal to sanction the salary package for Mr Bates, it was thought the VHI board might conclude a consultancy arrangement with Mr Bates, but Mr Hussey said that was not being considered.
The next consultant's post would be "pretty similar to the position which Aidan Walsh held". Mr Hussey said he was unable to reveal how much Mr Walsh had been paid by VHI. However, consultants' fees are considerable, and a year-long contract, it is believed, would easily exceed the proposed salary for a chief executive.
The constraints that applied to hiring consultants were to do only with ordinary commercial considerations, he added.