Mediator seeks to fix EirGrid chief's salary

A consultant has been appointed to mediate between the chairman of the new national grid company and its chief executive designate over the chief executive's remuneration package.

Industrial relations expert Mr Phil Flynn was appointed last November by the EirGrid chairman, Prof Eddie O'Kelly, to broker an agreement with the chief executive designate, Mr Kieran O'Brien.

The matter has been the subject of discussion for some time and the involvement of a mediator suggests that the process has been difficult.

Mr O'Brien has been managing director of the ESB's national grid division since 1993 and he is expected to join EirGrid later this year.

The new company will be vested with the responsibility of running the grid independently of the ESB in order to ensure that the liberalised electricity market is operated fairly.

The disagreement is thought to centre on the arrangements for Mr O'Brien's transfer from the ESB to EirGrid and his remuneration package in the new post. Mr O'Brien is expected to receive an increase reflecting his promotion from head of a business division within ESB to the leadership of an organisation in its own right.

Contracts for the most senior executives in State employment are subject to the approval of the Department of Finance. Mr O'Brien is thought to have been offered a package worth significantly more than €130,000.

Such a package is much smaller than those earned by the chief executives in the largest State companies, with thousands of employees. But it is believed to reflect the view that EirGrid will be a relatively small organisation when compared with other State companies because it will have about 100 staff.

EirGrid's spokesman said it had "absolutely no comment" to make on the matter.

Pending the finalisation of a transfer agreement and an infrastructure agreement, the separation is expected before the end of the summer.

The disagreement comes some years after a battle between the ESB and the Government over the remuneration package of its incoming chief executive in 1997, Mr Ken O'Hara.

Now retired, Mr O'Hara was obliged, after a stand-off between the ESB board and the Government, to accept an initial salary that was lower than the one the ESB board had offered him.