Bonuses will not be paid if Poolbeg plan fails

EXECUTIVES WORKING for the US-based waste company behind the construction of the Poolbeg incinerator stand to lose millions of dollars in bonuses if the project does not go ahead.

Covanta granted $18.25 million (€12.6 million) in “growth equity awards” in relation to projects in 2009, according to documents filed with the United States’s Securities and Exchange Commission ahead of the firm’s annual stockholders meeting next month.

The awards, which include $9.8 million to five named senior executives, were based on growth in 2009 in relation to six projects including the Poolbeg “energy from waste” facility.

The bonuses were granted in February 2010. However, the documents state that in order to protect stockholders from undue risk of a project not progressing the awards could not be “vested” or drawn down for three years, and even then would be subject to a “clawback” if the project was ultimately unsuccessful.

Work on the incinerator began in December 2009, but has been suspended since May 2010. Dublin City Council said it is in discussions with Covanta, in relation to restarting the project as soon as possible. The contract for the project is under review by city manager John Tierney and a decision on the project’s future is due to be made next month.

The bonus award was granted in February 2010 in respect of the Poolbeg project because of “breaking ground on [the] new development”. However, the document goes on to state that “if the Dublin facility is ultimately not constructed, under the terms of the award agreements, awards granted with respect to such project will not vest”.

The terms of the growth equity award would indicate that even if the award was drawn down three years from February 2010, if the project ultimately collapsed or was unsuccessful, the bonuses would be clawed back.

The council hopes the Poolbeg plant will be operational in 2013.

Fianna Fáil city councillor Jim O’Callaghan said there was a clear conflict in that it was in the financial interests of the Covanta executives to go ahead with the project but in the interest of Irish taxpayers for it to be stopped.

“We know that the Hennessy report is reported as finding that taxpayers may face a large bill for the incinerator by way of hefty penalties since Dublin City Council will not be able to provide to Covanta the amount of waste required under the contract,” Mr O’Callaghan said.

The Government should stop the development of the incinerator, he said.

The council and Covanta have disputed the findings of the Hennessy report which was commissioned by former minister for the environment John Gormley.