The ESB is seeking to introduce a pay freeze for its 8,000 staff for the next two years. The company today told trade unions that the pay of senior management is to be cut and that they will receive no further increases until 2011.
In a statement, the ESB said its chief executive, Padraig McManus, was taking a 10 per cent pay cut. He currently has a salary of €467,000 and a potential bonus of 25 per cent.
The ESB also said other senior mangement in the company would be taking a 5 per cent reduction in pay.
The introduction of a pay freeze would mean that ESB staff would not receive the next phase of the national pay agreement - worth 2.5 per cent - which is due in June.
The company has come under strong criticism in recent weeks for agreeing to pay the first 3.5 per cent installment of the national wage deal last month.
Minister for the Environment John Gormley said that there was widespread concern in Government at the increase paid to ESB staff. "It is seen as inappropriate and it is seen as sending the wrong signal at this time," he said.
The ESB has said it had no choice but to pay the increase under the deal as it was a profitable company.
A two-year pay freeze introduced over the coming weeks would last longer than the timespan of the current national pay deal.
In a statement, the secretary of the ESB group of unions, David Naughton, said it expected the company would continue complying with the terms of the national wage agreement as part of the social partnership process.
ESB management also signalled to unions that it wanted to develop a new pension scheme for future employees in the company. Such a move would likely mean the closure of the existing defined-benefit pension scheme for new staff in the ESB.
Personnel in ESB subsidiary companies currently have their own defined contribution schemes.
At the meeting with the group of unions today, ESB management urged that a current review of pensions be accelerated " in order to develop a new pension scheme for future ESB employees".
"An actuarial review of the current defined benefit scheme has commenced and negotiations are to begin shortly to address the expected deficit", the company said.
The Irish Timesreported last week that some estimates had suggested that the the ESB pension fund was facing a deficit of between €1.3 and €1.5 billion.
In its statement, the group of unions at the company said: "In relation to the ongoing pension review, we will consider the ESB's request to accelerate this process, and we will make a further statement on this matter following consultation with our members"