Nama and NTMA chiefs waive 15% of pay for one year

THE CHIEF executive of the National Treasury Management Agency, John Corrigan, and the chief executive of State assets agency Nama, Brendan McDonagh, have agreed to waive 15 per cent of their salaries for the coming year.

Mr Corrigan wrote to Minister for Finance Michael Noonan on December 22nd to confirm that he and Mr McDonagh would agree to the lower salaries for 2012.

Mr Corrigan currently has an annual salary of €490,000, while Mr McDonagh is paid €430,000, bringing the total reduction in the two men’s salaries to €138,000. This represents a cut of €73,500 from Mr Corrigan’s salary and €64,500 from Mr McDonagh’s pay.

Mr Noonan wrote to Mr Corrigan and Mr McDonagh in late December asking the two men to make such a waiver.

It is also understood that Mr Corrigan and Mr McDonagh intend to forego any bonus payments awarded in relation to 2011, having last February made a similar decision.

Under the terms of his contract, Mr Corrigan can be paid a performance-related bonus of up to 80 per cent of his salary, while Mr McDonagh’s bonus can be as high as 60 per cent of his salary.

The €250,000 pay cap for senior officials and executives in the public sector announced by Minister for Public Expenditure Brendan Howlin last June does not apply to the NTMA or Nama – which comes under the auspices of the NTMA – because of the individual nature of the contracts.

A recent report by retired banker Michael Geoghegan recommended that the Government introduce “robust” long-term incentive pay for Nama staff along private-sector lines, rewarding them for recovering bank loans originally worth €74 billion.

The report by Mr Geoghegan warned that Nama risked losing staff to the private sector as the economy recovered if they were not properly incentivised to recoup debts of €31.7 billion, the amount the agency paid for the loans. Mr Geoghegan has been lined up to chair a new advisory group to Nama announced by Mr Noonan in his budget speech.

The Minister last year indicated that 14 executives employed by the agency and Nama had annual salaries of more than €250,000.

Mr Corrigan’s predecessor at the NTMA, Michael Somers, who retired in 2009, was paid more than €1 million in 2008. Dr Somers was paid a salary of €576,000 as well as a performance-related bonus of €403,000 and a fee of €30,000 for his role as a commissioner of the National Pension Reserve Fund.

All 350 staff at the NTMA and Nama have performance-related elements built into their pay under their contracts. The agencies awarded bonuses of almost €2 million in relation to 2010, or an average of €7,681 to each employee.

Nine senior executives, including Mr Corrigan and Mr McDonagh, waived bonuses totalling €905,000 for this period.

Mr Corrigan told an Oireachtas finance committee last September that the NTMA paid private-sector rates to its executives to get skilled staff to do “market-demanding” work.

Although he knew bonuses were “a dirty word”, staff had to be incentivised, he said, or they would head for greener pastures.

The NTMA was “a very serious business”, he told the committee.