Chief executives of leading firms see pay double from pre-Covid levels

Bonuses drive executive rewards as business booms on back of pandemic stimulus

The pay packages of the chief executives at Ireland’s top listed companies jumped last year to almost double pre-Covid levels, fuelled by bonuses as companies’ earnings and share prices advanced globally on the back of economic stimulus from central banks and governments during the pandemic.

The median remuneration of bosses at the eight top 10 companies listed on Dublin’s Iseq index that have so far published annual reports for 2021 rose by 66 per cent last year to €4.79 million – almost double the €2.42 million median of the same groups in 2019.

The hike is in line with a wider international experience that also saw the pay gap between chief executives and workers widen last year, at a time when households are grappling with soaring living costs.

Some of the leading Iseq companies, including Paddy Power owner Flutter, insulation maker Kingspan and housebuilder Glenveagh Properties, face potential shareholder pushback on their executive pay policies at upcoming annual general meetings.

Top earner

Building materials giant CRH's chief executive, Albert Manifold, received a total pay package of €13.9 million last year. That was up 24 per cent on 2020 and sets a new record for a head of a Dublin-listed company. The increase was driven by a share bonus payment tied to an awards policy set three years ago.

As CRH is also listed in London, it is obliged by UK law to report on chief executive pay relative to its workers in that market. Mr Manifold's remuneration was 289 times the median €48,200 pay last year of CRH's UK employees, who account for 13 per cent of the group's total workforce. The ratio was up from 207 times in 2019.

Flutter chief executive Peter Jackson’s £8.4 million (€11.1 million) package last year was second-highest among the largest Iseq companies, driven by shares awarded under a long-term incentive plan.

Two influential advisers to large stock market investors – Institutional Shareholder Services (ISS) and Glass Lewis – have urged Flutter shareholders to vote at an upcoming agm against a plan to increase Mr Jackson’s basic salary by 26 per cent this year as the board postpones a new long-term incentive plan in light of the company’s declining share price.

The remuneration of cardboard box-maker Smurfit Kappa's chief executive Tony Smurfit came to €6.24 million last year, up 19 per cent on 2020 and 70 per cent on 2019. A surge in e-commerce and demand for sustainable packaging during the pandemic pushed the company's earnings to record levels last year.

Incentive plan

Kingspan chief executive Gene Murtagh's compensation jumped almost 75 per cent last year to €5.71 million. ISS is recommending that shareholders rebel later this month against a plan to increase future potential awards under the company's executive long-term incentive plan by 50 per cent to three times basic salary.

Meanwhile, AIB and Bank of Ireland, which were among the top executive payers on the Iseq before the financial crash, had the two lowest chief executive packages among the leading 10 companies in the market last year, as pay caps remain in place across bailed-out lenders.

Bank of Ireland chief executive Francesca McDonagh’s €960,000 pay for last year was unchanged from the previous 12 months, as was AIB chief executive Colin Hunt’s €600,000 remuneration.

Joe Brennan

Joe Brennan

Joe Brennan is Markets Correspondent of The Irish Times