TWO TOP executives in semi-State companies Bord na Móna and Bord Gáis Éireann have said they will not be accepting bonus payments that were due to them.
Bord na Móna chief executive Gabriel D’Arcy has written to company chairman Fergus McArdle, voluntarily waiving any performance-related pay for the year 2010/2011, estimated at more than €70,000.
Mr D’Arcy was writing in advance of a company board meeting scheduled for July 18th which was due to determine the CEO’s performance-related pay in the context of the performance for the financial year ended March 30th.
In his letter, Mr D’Arcy said Bord na Móna had a strong year and expected to announce increased earnings for the fifth year in a row.
He said that he had taken his decision in the context of the challenges faced by the country and the economy.
“It is vitally important that there is a clear and singular focus on driving performance in the commercial semi-State companies and there is an urgent need for the Government to agree a clear unambiguous system of remuneration that drives performance.
“I welcome the comments of various Ministers regarding the need for a proper system of performance-related pay. Bord na Móna operates a well-developed system, throughout the organisation, which links remuneration to both individual and company performance.”
He concluded: “Government policy ought to reward performance and innovation so that we can attract, retain and motivate top quality people to deliver real results for our shareholders.
“We look forward to engaging with Government on how we can jointly develop a system that delivers enhanced performance across the semi-State sector.”
Chief executive of Bord Gáis Éireann John Mullins has also advised his company’s board that he will forgo payment of a performance bonus in respect of 2010, and for the following two years, 2011 and 2012.
He also advised the board that he would reduce his salary further to €250,000 per annum.
This represents a 15 per cent salary reduction from his contractual salary of €294,000 per annum.
A statement from Mr Mullins said that, in total, this meant he would forgo an earnings potential of approximately €280,000 until the conclusion of his contract at end of 2012.
Mr Mullins was recruited from the private sector in 2007 on a basic salary of €294,000. This went down to €288,000 following a voluntary pay cut in the following year.
This went down again in 2009 to €270,000; in 2010 to €265,000 and this year to €250,000.
In 2009 he received €50,000 for the achievement of specific performance-related targets in 2008. Last year he was paid €60,000 for the achievement of specific performance-related targets in 2009.
He has decided to forgo bonuses in relation to 2010, 2011 and 2012. Mr Mullins’s contract is due to expire in December 2012.
A Government spokesman said that “the economy is not in a position to sustain that sort of mindset, never mind paying it out”.
“The Government in the current climate has quite a lot of moral authority to say to people. This is the situation in which we find ourselves, sacrifices are being made across the board.”
He added: “We will do all in our power to ensure that semi-States and anybody that is being paid out of the taxpayers’ purse behaves responsibly in that regard.”