CWU executive to discuss €1.9m Scanlon package

The Communication Workers Union's (CWU) executive council will discuss the more than €1.9 million in pay and benefits received by Mr Con Scanlon, the general secretary of the union, in his role as Eircom deputy chairman.

Mr Pat McCarthy, the union's president, said he expected that Mr Scanlon would be given an opportunity to explain the payments next week.

Mr Scanlon got shares worth around €580,000 when the company floated last week and also negotiated a pension worth €1 million over 10 years together with a lump sum of €230,000.

He also earned fees of €106,000 last year for being deputy chairman in addition to a similar figure in his position as a full-time trade union official.

Mr Scanlon was appointed Eircom deputy chairman in late 2001 on foot of his role as chairman of the Eircom Employee Share Ownership Trust (ESOT). He held this position because of his job with the CWU, which is the dominant union at Eircom. The ESOT was set up in 1999 and was given a 15 per cent stake in the company - then Telecom Éireann - in return for acquiescing to its privatisation.

In 2001 the ESOT's support for Valentia Telecommunications was instrumental in its successful €3 billion takeover of Eircom. Mr Scanlon played a crucial role in the decision by the ESOT to support Valentia rather than the rival offer from Mr Denis O'Brien's eIsland consortium, which had offered a higher price.

As part of the deal the ESOT was allowed increase its stake to 30 per cent from 15 per cent and nominate two directors, one of whom would be the deputy chairman.

Mr Scanlon became deputy chairman, while Mr John Conroy, the chief executive of Merrion Capital was the other ESOT appointee.

Mr Conroy received 125,000 shares in the IPO. Both men got their shares "in acknowledgement of their respective contributions to the group, including leading up to the global offer \", according to offer documentation.

One of the other unions at Eircom, the Civil & Public Services Union, has expressed disquiet about the payments received by Mr Scanlon and the other Eircom directors as part of the company's flotation.

In a circular to its members last week it said the directors received "significant remuneration in excess of the norm for staff representatives on company boards. The CPSU was not aware of this and the matter was not brought to the attention of the union coalition".

Mr McCarthy said this week that the executive council was currently preoccupied with the dispute at An Post, but that he believed Mr Scanlon would explain the payments in due course. He said that the issue had been raised with him and other executive council members by union members and he expected the matter to be dealt with next week.

He added that Mr Scanlon had done an excellent job as general secretary. He said he did not believe that there was a conflict of interest between Mr Scanlon's role as CWU general secretary and the deputy chairmanship of Eircom.

Mr Scanlon was on secondment to the CWU from Eircom until last year. He was required to step down as an Eircom employee last September "to ensure a formal separation between his position as an employee and his duties as chairman of the ESOT", according to the prospectus.

Eircom created a special pension fund for Mr Scanlon - the Executive Defined Benefit Scheme - which paid him an "immediate pension" of €70,092 a year until his Eircom pension kicks in at 60.

The cost to the company of funding Mr Scanlon's scheme is €1 million. He also received a lump sum of €210,275 in return for agreeing to waive his right to receive a lump sum of €173,000 when he is 60.