Pay increases awarded to the chief executives of the top commercial semi-states have outstripped those given to the taoiseach and ministers by a ratio of 5-1 over the past 12 years.
As the government pleads with the chief executives of publicly owned commercial semi-states to forgo six-figure bonuses, the soaring salaries of CEOs’ pay stems from a decision by Charlie McCreevy as finance minister in 1999.
McCreevy agreed to allow the pay of chief executives in semi-states to be decided after comparisons with top rates of private-sector pay, instead of being benchmarked, as had been the case, against public-sector pay norms. The decision followed the December 1996 report of the Review Body on Higher Remuneration in the Public Sector. The body was led by Michael Buckley, a former assistant secretary in the Department of Finance who had moved to AIB.
It recommended that chief executives’ pay be allowed to chase private-sector rates so that semi-state organisations could attract high-calibre executives. There were misgivings in the Department of Finance at the proposals, and McCreevy did not take action until 1999.
At the time the pay of the ESB’s chief executive was €146,470 while the taoiseach, Bertie Ahern, was on €131,445. Last year, the ESB chief received a package of €459,843, including bonuses but excluding pension contributions. This represents a 214% increase over the 11 years.
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Taoiseach Enda Kenny is now paid €200,000 a year, representing a 52% rise since 1999. A minister’s pay over the same period has gone from €104,902 to €169,000, an increase of 61%.
The gap is even more obvious at the Dublin Airport Authority whose chief executive, Declan Collier, agreed to forgo a €106,000 bonus last week. In 1999, the CEO of what was then Aer Rianta was paid €123,557.
Last year Collier’s package, again less pension contributions but including the bonus since foregone, was €532,500, a 331% increase in 11 years.