£120,000 salary for new VHI chief executive
THE new chief executive of the VHI is to receive just under £120,000 a year, according to a senior source in the organisation. The board expects to have the position filled by February 1st. Three names wilt be put to the next meeting of the board, which has agreed the salary. The amount is understood to be acceptable to the three figures who are in the running".
A review of the restrictions on the pay levels of semi state chief executives is currently under way. It is expected the Review Body on Higher Remuneration in the Public Service will forward its recommendation to the Minister for Finance Mr Quinn "early this year", according to the Department of Finance.
At present, Government guidelines specify maximum salaries for public sector chief executives although most new appointments to senior semi state positions have avoided the guidelines by offering fixed term contracts.
The last chief executive of the VHI, Mr Brian Duncan, received a salary of £65,000. The company has a turnover of £300 million.
The board of the VHI believes, the review body will recommend that semi states be given the freedom to offer chief executives remuneration levels compatible with the job.
"The board is determined that the salary will not be a problem," said the source. "If there is a problem then there will be a number of resignations from the board."
Mr Duncan resigned from the VHI in September following an investigation by a board sub committee into differences which had arisen between Mr Duncan and the non executive chairman of the company Mr Noel Hanlon.
The VHI is expecting to return a profit for the financial year to February 28th next of "up to £3 million," according to the source.
Last July, the Department of Health was told the company expected to make a loss of £500,000, but the position has since improved. Savings have been achieved in payments to hospital consultants and to the private hospitals.
The collapse of the agreement which had existed with the private hospitals representative association, the IHAI, has led to "considerable savings", according to the source. The VHI is not paying increases which have been announced by the hospitals.
In relation to 1997/1998, the board has yet to reconsider its projections since the announcement that the fees for private beds in public hospitals are to increase by 9 per cent. The increase came into affect on January the 1st.
No decision has been taken as yet on whether an increase in VHI fees will be needed next September, according to the source. There will be no increase before that.
Discussions are ongoing between the VHI and the British health insurance provider. PPP, about the possibility of the VHI selling PPP products such as a dental care plan, to its customers here. The possibility of a strategic partner for the VHI - under which a partner would invest funds in return for a shareholding - is something the company is looking at.
The VHI is planning to introduce a new plan which will provide health coverage worldwide. The plan would be of interest to clients who work abroad.