The Government has sanctioned significant pay increases for chief executives of commercial State bodies.
The Department of Finance confirmed yesterday that the Cabinet had approved new pay ranges for chief executives of companies such as the ESB, CIÉ, RTÉ, VHI and An Post as a consequence of a report from external consultants.
The report, compiled by the Hay group, found that pay levels of chief executives in some of the larger commercial State bodies was lagging nearly 20 per cent behind the average in the private sector.
It also stated that in practice the pay of chief executives in the commercial State sector was 14 per cent behind the market average.
The report noted that chief executives in the private sector received larger bonuses than their counterparts in the commercial State sector.
The report noted the majority of companies in the commercial State sector "are very far away from matching, or even approaching comparable private sector total cash packages at CEO level".
Under the new pay policy, approved with effect from last November, chief executive of the ESB Pádraig McManus will have the highest salary range of any CEO in the commercial State sector.
The board of the ESB will be able to pay Mr McManus between €395,760 and €494,700.
The report states that in 2006 the ESB chief executive received a base salary of €332,100 and a total package of €381,000.
A spokesperson for the ESB said last night that the company could confirm that it had received a letter from the Department of Communications, Energy and Natural Resources outlining the proposed amended pay ranges.
The spokesperson said that the letter would be formally considered by the board of the ESB at its next meeting later this month.
The board of An Post, for example, will be able to pay chief executive Donal Connell between €299,166 and €373,932.
The board of the Dublin Airport Authority will be allowed to pay chief executive Declan Collier between €273,564 and €342,006.
The pay scale for RTÉ director general Cathal Goan has also been set between €273,564 and €342,006.
The report revealed that in the case of 23 chief executives of commercial State bodies the base pay level was below the median for comparable roles in the private sector.
"Of the 14 larger roles in the sector, only two have salaries that are positioned closer to the median - in both cases, An Post and the Dublin Airport Authority, executives have been recruited from the private sector in the last two years . . . any positioning below median would have been inadequate in helping to recruit these particular people," it stated.
The chief executives of the commercial State bodies are the second top level group in the public sector to receive significant increases in recent months under Government pay reviews. In October the Cabinet accepted a report of the review body on higher remuneration which recommended pay rises for many senior civil and public servants as well as chief executives in the non-commercial State sector.
Details of the new increases sanctioned by the Cabinet come just days before a third pay report, the benchmarking review, is expected to recommend that most public servants should receive no special increases. The review will be published on Thursday.
A Department of Finance spokesman told The Irish Timesthat the Minister had brought proposals on the new pay scales to Cabinet based on the report of the external consultants last October.