Call for executive pay action as salaries rise up to 238% in six years
Ictu report urges greater transparency in how pay packages are determined in Ireland
The Ictu report calls for major reforms regarding how executive pay is determined and structured.
Executive pay in some Irish private companies rose by as much as 238 per cent between 2009 and 2015, a period in which average hourly earnings increased by just 2 per cent on a weekly basis, a new study has found.
The report from the Irish Congress of Trade Unions (Ictu) calls for major reforms regarding how executive pay is determined and structured. Among its recommendations are greater transparency in how pay packages are determined, action on bonuses, a higher tax rate on incomes of more than €1 million, and a limit, to 13, on the number of directorships individuals can hold.
The study is based on an examination of 21 private companies, the majority of which are listed on the Iseq index.
Ictu’s report says increased transparency should be encouraged by forcing private companies to set broad parameters under which pay would be set.
It adds that consideration should be given to extending the mandate of the Low Pay Commission to monitor the relationship between highest and lowest pay. It also wants to see all companies receiving public contracts for services to be required to publish a report outlining pay and bonuses data, as is required under the UK corporate governance code.
The study recommends ensuring that shareholder resolutions on executive pay are binding, rather than advisory. It also urges the appointment of more outsiders as non-executive directors to boards to promote greater gender balance and a bigger role for groupings such as worker representatives and pension funds.
According to Dr Peter Rigney, one of the report’s authors, an examination of how executive pay and bonuses are set in Ireland and their relationship to the wider economy is long overdue.
“Unlike most other EU countries where executive pay is a matter of public scrutiny and comment, we seem to pay very little attention to the issue here. There is little doubt that this is partially driven by a real lack of transparency on executive pay in this economy,” he said.
“We believe companies should be required to take into account issues such as financial performance, employee welfare, the environment and consumer satisfaction when deciding on top pay,” Dr Rigney added.