IMO was advised against exposing itself to claims for 'reckless trading'
In legal advice provided to the Irish Medical Organisation in the run-up to the announcement yesterday of the resignation of its chief executive, the issue of a possible financial strain on the organisation emerged.
Senior counsel outlined a number of options available to the doctors’ representative organisation but said “what the organisation should not do, however, would be to simply trade on an insolvent basis, since such a course of action could, in the event of a liquidation, expose its officers to a possible claim for the imposition of personal liability for reckless trading.”
George McNeice, who is in his early 50s, was granted a contract from January 1st, 2003, until he reached the age of 55. The starting salary was €250,000 per annum with a potential performance -related bonus of 30 per cent of salary. In addition, one-third of a previous year’s bonus was to be automatically consolidated in the salary for that year and would form the basis for his remuneration from then on.
The pension arrangements in the original contract refer to a defined contribution scheme under which the organisation would contribute not less than 35 per cent of his total salary plus any bonus applicable in a given year. However, it emerged that subsequent negotiations had resulted in Mr McNeice being granted a defined benefit pension scheme. In 2011 the organisation sought and was granted retrospective revenue clearance for a defined benefit pension scheme for its chief executive.
It is the potential liability of the organisation funding a defined benefit rather than a defined contribution scheme that appears to have led to concerns over the chief executive’s financial package. On November 1st, a member of the organisation wrote to the union’s executive requesting an extraordinary general meeting to discuss the terms of Mr McNeice’s salary and pension entitlements.
Asked if such a meeting would now take place, a spokesman declined to comment last night. The spokesman also declined to comment when asked if the financial stability of the organisation was under threat.
In his contract, Mr McNeice is entitled to a severance payment of three years’ salary. According to documents seen by The Irish Times, his reckonable salary for pensionable purposes from the beginning of 2013 will be €492,355 plus one-third of the bonus paid in 2008. This would bring his salary to well over half a million euro and would equate to a lump sum severance payment in excess of €1.5 million.