THE DEPARTMENT of Health wanted to pay the new chief executive of the HSE a salary of up to €365,000 – more than €130,000 above the official rate for the post.
The Irish Timesrevealed in late May that the Government had agreed to pay Cathal Magee €322,000 – almost €100,000 more than initially planned.
However, official Department of Health documentation, released under the Freedom of Information Act, suggests Mr Magee believed the salary package for the post would be “closer to €400,000” although he was prepared to settle for €350,000 and a car allowance of around €20,000.
Secretary general of the Department of Health Michael Scanlan told the Department of Finance that while the sanctioned rated for the job was €228,466, the chairman of the HSE had informed him that the proposed appointee – Mr Magee, a former acting chief executive of Eircom – had been earning considerably more than this in his previous post.
“The proposed appointee is keen to take on the role of CEO, is quite prepared to take a considerable drop in earnings and accepts also that the payment of performance-related bonuses is not appropriate in current circumstances.
“While he understood that the salary package would be closer to €400,000, he is prepared to settle for a package of €350,000 plus a car allowance of the order of €20,000,” he said.
Mr Scanlan told Ciaran Connolly, secretary general for public service management at the Department of Finance, that there would also be a contribution of 25 per cent of basic salary into a private pension fund.
“I have discussed this with my Minister [Mary Harney] who is of the view that, notwithstanding existing policy on senior public service pay rates, the proposed remuneration package is appropriate given the scale of the job and the need to secure the services of a new CEO, whom the chairman has assured us is of the highest possible quality, and who is prepared to accept a package that is considerably lower than his previous reward package.”
Mr Scanlan said he wanted to seek the formal sanction of Minister for Finance Brian Lenihan to allow the chairman of the HSE to offer the proposed appointee a salary of up to €350,000 plus a car allowance of up to €20,000, or alternatively, a straight salary of €365,000.
He said he understood the Minister for Health had discussed the issue with Mr Lenihan.
However, the Department of Finance wrote back a number of days later in early June and said that “in light of the exceptional circumstances involved” it would agree to Mr Magee receiving the same package as paid to current HSE chief executive Prof Brendan Drumm, as reduced by the emergency financial legislation last year.
Mr Magee would not receive the performance-related bonuses paid to Prof Drumm, the department said.
The department added the HSE could pay Mr Magee “on a personal to holder basis” a pay rate of €322,113, a contribution of 25 per cent of basic salary into a private pension fund nominated by him, a car allowance of €13,800 per annum and a fixed-term, non-renewable contract of five years.