O’Reilly payout sparks INM row

Denis O’Brien’s representatives on the board of Independent News & Media are understood to be reviewing the issue of Gavin O’Reilly’s severance package from the group.

In an embarrassing U-turn yesterday, INM had to admit it had been wrong in announcing that both votes at the group’s Thursday board meeting — namely regarding the appointment of Vincent Crowley as chief executive and the terms of Mr O’Reilly’s exit package — were unanimous.

While the entire board did vote in favour of Mr Crowley becoming the new chief executive, Paul Connolly and Lucy Gaffney — Denis O’Brien’s two remaining representatives on the board — voted against the terms of Mr O’Reilly’s pay-off, the details of which are unknown.

A spokesperson for INM said announcing two unanimous votes had been an “administrative error”.

Given that such votes only need a majority in order to be passed, it is unclear what options the two directors unhappy with proceedings have left to consider.

Neither was available for comment yesterday, and a spokesperson for Mr O’Brien — INM’s largest individual shareholder, with a 22% stake — could not be reached.

Gavin O’Reilly resigned as chief executive of INM on Thursday, saying that recent high-profile shareholder tensions were proving to be “an unnecessary distraction” for the company and were not in the best interests of the business. He had been with the company for 19 years and took over as chief executive in 2009 from his father Tony O’Reilly.

Mr Crowley was immediately promoted from his post of group chief operating officer to chief executive at Thursday’s meeting.

It has been speculated that high-profile shareholders — particularly Mr O’Brien, but also possibly Dermot Desmond who has a 6% holding in INM — were steeling themselves to push for a removal of Mr O’Reilly and a shake-up of the board at the company’s upcoming annual general meeting in early June.

Communications Minister Pat Rabbitte was quoted as saying yesterday that the Government had concerns over the diversity of the Irish media ownership landscape and would have more control over the issue if upcoming competition legislation changes were passed.