Semi-state bosses get limited pay hikes

Annual reports show that few semi-State bosses got major wage rises, writes Ian Guider.

PAY hikes for the bosses of the country's largest semi-state organisations last year were less than increases in the profits at the firms. With all but the ESB left to publish its annual report and accounts for 2004, it appears most chief executives of semi-state firms are getting modest pay rises despite soaring profits at their companies.

The average salaries of the chief executives of the largest eight semi-state firms is difficult to calculate, given the upheaval in the boardrooms last year, but a study of the 2004 annual reports by the Irish Examiner show few received any major boost to their pay.

The highest paid chief executive in 2004 was Willie Walsh, the now departed head of Aer Lingus. Mr Walsh, who is now British Airways chief executive, was paid €544,000 in 2004, up €46,000, or 9%, on 2003.

Last year the airline reported a record profit of €107 million, up nearly 30% on the previous year, when exceptional items relating to its ongoing restructuring are excluded.

Mr Walsh's successor Dermot Mannion, who will join the airline in the autumn, is expected to take up the mantle as the highest paid boss in the semi-state sector.

The Aer Lingus annual report also shows that the total bill for the airline's board would rival that of many companies in the private sector. Including Mr Walsh's earnings, the board walked away with €1.5 million in 2004.

At Bord Gais, chief executive Gerry Walsh received a much more modest pay rise of 5% even though profits at the company grew by 15% to €118 million. He took home €302,000, up €17,000 on the previous year. The remaining Bord Gais directors shared €118,000 in fees for the year, remarkably small for a company of its size.

But not all chief executives did well. At the State forestry company, Coillte, outgoing head Martin Lowery saw his pay actually fall despite a 37% jump in profits. Mr Lowery's salary went down by €11,000 to €293,000.

At An Post, Donal Curtin's reward for returning the company to profit was remuneration package of €326,000, but without any performance bonus.

Over at the National Lottery, Ray Bates took home €244,000, a rise of just 2% on his earnings the previous year. The increase was below the 3.4% rise in sales.

Aer Rianta, which gave way to the Dublin Airport Authority last year, paid current and former directors over €1.4m. Much of this was compensation for loss of office to the acting chief executive Margaret Sweeney, who left the company last September, and to other directors. Stripping out exceptional payments, fees to the board were €591,000, up 11%, though profits at the company rose by €10m to €31.1m.

Cathal Goan, the director-general of RTÉ was paid €296,000 last year. The comparison with the previous year at the station is difficult as Mr Goan took over from Bob Collins in October 2003.

How much Vincent Sheridan, the head of the VHI, is being paid is hard to gauge as the company's annual report does not disclose the figure to its members or taxpayers. At the weekend, it was reported that Mr Sheridan is on a contract worth around €300,000 a year.

The annual report for the ESB has not been published yet. Although the largest in terms of both profitability and turnover, its chief executive Padraig McManus falls below Willie Walsh in the pay league and that was expected to continue last year.

The annual reports reveal that basic salaries make up the bulk of the pay received by the semi-state bosses, with few earning performance-related bonuses.

While the chief executives and boards are earning far less than their counterparts in the private sector, they can take comfort that their ultimate paymasters Government ministers earn just €180,000 a year.