Salaries paid to Ornua executives ‘exorbitant’

A former president of the Irish Creamery Milk Suppliers’ Association (ICMSA) has described as “exorbitant” the salaries being awarded to top executives at the State’s dairy marketing body, Ornua.

Pat O’Rourke said farmers were “shocked and disillusioned” at the news that Ornua’s top nine staff received €9.2 million in pay and bonuses over the last two years.

“The farmers I’ve talked to say there is simply no justification for these massive salaries when the price they’re receiving for their product is at a 10-year low.”

Mr O’Rourke, who runs a dairy farm in Co Monaghan, compared the issue to the pay controversy that surrounded the Irish Farmers’ Association late last year.

Because of new accounting rules, Ornua, formerly the Irish Dairy Board, was forced to disclose details about executive pay and directors’ fees for the first time in its annual report, published on Wednesday.

While the group revealed figures for total executive remuneration, it declined to give a breakdown of the various packages involved or the pay its chief executive, Kevin Lane, receives.

‘Talented staff’

“As a global, privately owned, commercial business with sales of €2.5 billion in 2015, attracting and retaining talented staff is of strategic importance to Ornua,” it said yesterday . “Accordingly, executive and board remuneration, which is performance-related and benchmarked against industry peers, is agreed and overseen by its remuneration committee with support from independent professional advisers,” it said.

Total fees for the 14 directors that sit on its board, most of whom are co-op executives, amounted to €509,000 in 2015 which is up 44 per cent on the €352,000 paid in 2013.

Mr O’Rourke, who served on the Ornua board from 2001 to 2005 as ICMSA president, said he received an annual director’s fee of €12,000. However he said the fees now being paid to Ornua directors were about €36,000. These fees should be going back into the the co-ops, which are already paying directors large salaries.

‘Infuriating’

“What is infuriating is that while these massive salaries and fees are being paid, farmers have to pay an administrative levy on all milk supplies whether it goes to the dairy board or not,” he said.

Ornua has announced the suspension of its milk levy as a result of the collapse in dairy prices. The group deducts a tariff of 0.14 cent a litre from dairy farmers in return for marketing Irish dairy produce abroad. The levy, equivalent to €350 a farmer, is worth about €6 million annually to Ornua.

Mr O’Rourke said that he believed Ornua should be owned directly by the farming community through direct farmer shareholding.