State ban on bonuses for chief executives to remain
THE GOVERNMENT’S ban on bonus payments for the chief executives of commercial State companies is to remain in force for another year.
It is understood that a review commissioned by the Minister for Public Expenditure and Reform found there was “no case” for reactivating the bonus system.
A spokeswoman for the department said the performance-related award scheme for chief executives in commercial State companies was currently suspended as they had all voluntarily waived their bonuses.
Brendan Howlin announced in June of last year that he would review the current system of performance-related award schemes for chief executives of commercial State companies.
This would be carried out in conjunction with Ministers who have commercial State companies under their aegis.
The spokeswoman for the department said the Government had decided to keep the matter of bonuses under review.
A further report will be submitted to the Cabinet on the issue by the department before July.
As part of the process departments were asked for their views. In its submission the Department of Transport, Tourism and Sport said it favoured “the retention but tightening of performance-related pay schemes, particularly for a reduced level of award and subject to the achievement of highly challenging, measurable and published targets”.
It said given the substantially reduced salary levels the Government had set for new chief executives, the termination or modification of performance-related pay schemes would result in some receiving lower levels of remuneration than other senior managers.
“For example, under the existing Hay rates a chief executive in a medium-sized port company had the potential to earn €122,000 basic salary plus up to a 35 per cent performance award, giving a potential €164,000.
“If the performance-related pay schemes are terminated, a new chief executive in such a port company would receive a salary of €81,577. It is extremely likely that other senior managers in such companies would be on a higher level of remuneration.”
The Minister for Public Expenditure and Reform has no power over the pay of any staff in commercial State bodies other than chief executives.
However in April Mr Howlin wrote to all Ministers asking them to advise chairs of commercial State bodies that “cognisance be taken of Government policy on pay within the public sector when considering the remuneration of all future appointments of staff within the company”.