ANOTHER SEMI-State board chief executive, David Gunning of Coillte, has said he will not accept the performance-related bonus due to him last year.
A spokesman for Coillte said Mr Gunning had informed the chairman of Coillte, Brendan McKenna, of his decision not to accept the bonus.
Mr Gunning’s bonus payments made headlines this year when he was paid a bonus of € 56,435 last December despite a request from former minister for agriculture Brendan Smith that the payment not go ahead.
That payment was made in respect of 2008, and had been deferred but was eventually paid to Mr Gunning late last year. He has received no bonus payment for 2009.
The controversy between Government and Coillte emerged in a Department of Agriculture briefing document obtained under the Freedom of Information Act, by The Irish Times.
It showed Mr Gunning was appointed to the job in March 2006 at a basic salary of €297,024 on a seven-year contract.
In November 2007, a Department of Finance letter said that from 2008 commercial State bodies had an option of increasing the maximum possible annual performance bonus from 25-35 per cent of basic pay.
It said the relevant guidelines stated performance criteria were required to impose challenging and demanding performance standards on the chief executive.
The payment of performance-related pay would be determined by the remuneration committee of the board of the commercial State body, augmented for this purpose by a civil servant nominated by the Minister.
“The Coillte board decided it was appropriate to award the chief executive a 19 per cent annual bonus for 2008, which equates to €56,435 on the basis of pay rate above,” it said.
Coillte was verbally instructed that no bonus should be paid for 2008, and Mr Smith had put this in writing at the request of the company.
“The minister did also recognise there was, however, no legal basis for him to request or insist that the bonus payment be withheld per se,” the memo continued.
It said Coillte later wrote to Mr Smith in July 2009 and advised that the board had given the matter serious consideration and decided it was appropriate to award the chief executive an annual bonus of 19 per cent for 2008.
However, it also told the minister that Mr Gunning had agreed to defer payment of the bonus “until such time as economic circumstances had improved and that the timing of the payment would be at the discretion of the board”.
The briefing document said the instruction on the non-payment of a bonus for 2008 was reiterated during 2010, but on January 21st, 2011, a letter had been received from the Coillte chairman.
It said the matter was considered by the board and remuneration committee on December 16th, 2010, and the board considered it was neither appropriate nor tenable to continue to defer the payment given the significant improvement in the performance of the business in 2010 and its contractual obligations to the chief executive. “Consequently, the board resolved to pay the annual performance-related pay for 2008 in December, and payment has since been completed,” the letter concluded.
The briefing document said: “The Minister’s displeasure at this decision and the company not inviting a departmental representative to the meeting of the remuneration committee has been conveyed in writing to the company.”