Bosses of commercial State bodies are in line for significant pay increases after the Government signalled it would update rules to allow a “market rate” to be paid to chief executives.
Cabinet agreed yesterday to implement recommendations made by the Senior Posts Remuneration Committee which would lead to pay reviews and possible salary increases worth tens of thousands of euro for chief executives of almost 30 commercial State bodies.
It came against a backdrop of sustained criticism from the Opposition of Government plans to set up a new Housing Activation Office – not a commercial State body - as well as the expectation Nama boss Brendan McDonagh would keep his €430,000 annual salary if chosen to lead it.
Coalition leaders yesterday stopped short of endorsing the Nama chief executive to be named as the State’s housing “tsar”.
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Minister for Housing James Browne said on Tuesday that Mr McDonagh was his preferred choice for the role, but Taoiseach Micheál Martin said no decision had been made yet – while a spokesman for Tánaiste Simon Harris issued a thinly veiled rebuke to Mr Browne saying such an appointment should be discussed by Coalition leaders in the first instance.
Announcing the Government decision on top executive pay in commercial State bodies, Minister for Public Expenditure Jack Chambers said the Government would implement most recommendations made by the committee. Its report was published on Tuesday.
In its report, the committee said it had “concluded that the current system of CSB (commercial State bodies) CEO remuneration and contracts is not optimal in serving the interests of the CSB, the State or the taxpayer”.
It made 17 recommendations intended to address issues of recruiting CEOs for organisations including RTÉ, Dublin Bus and Coillte. It said a process should be established to gauge the level of pay within each organisation and compare it to corresponding remuneration levels for private sector enterprises operating in the same sector.
The roles should be assessed in terms of the complexity and size of the organisations according to a prescribed formula.
It said individual boards and remuneration committees should then decide on the appropriate scale for the chief executive of that CSB, with the ceiling being 120 per cent of the market median salary.
[ Decisions on pay rates for semi-State chiefs needed from next governmentOpens in new window ]
Mr Chambers said the Government accepted the need to update a system that had been in place for more than a decade and would move to generally implement the recommendations.
He said the upper limit on any proposed package would be the market rate rather than 120 per cent of it. However, there would be no backdating of any increases to May 1st of last year, another committee recommendation, and no reintroduction of performance-related bonuses worth up to 25 per cent of salaries, which was also proposed.
Meanwhile, the Cabinet approved plans to set up a new Housing Activation Office (HAO), with the identity of its leader set to be discussed further at a meeting of the Cabinet subcommittee on housing on Thursday.
Mr McDonagh’s name has been publicly linked to the role at the HAO for some months. Amid sustained Opposition criticism, Taoiseach Micheál Martin told the Dáil that no decision had been made on who would lead the new office.
Mr Martin said that there would be no additional cost to the State whoever was appointed, as the incoming chief executive would be seconded from elsewhere in the public service, but the Opposition ramped up criticism of the potential appointment of Mr McDonagh.
A source close to the Taoiseach said that there had not been an opportunity to endorse any candidate yet.
Some Government TDs are privately concerned at the continuing controversy, including the amount of political capital being expended on the appointment. There is also private criticism from within the property development sector, where critics question how applicable Mr McDonagh’s experience with Nama is to homebuilding.
