Shannon Foynes Port ordered to pay CEO €300,000 in unpaid bonuses

The €297,863 represents unpaid bonuses between 2010 and 2017

It was the Government's position at the time that performance-related pay should not be discharged to CEOs of commercial semi-state companies. File picture: Liam Burke/Press 22

The High Court has ordered Shannon Foynes Port Company to pay its CEO, Pat Keating, €297,863 in outstanding bonuses.

At the High Court, Mr Justice Mark Sanfrey has granted judgment against commercial semi-state firm, Shannon Foynes Port Company, to Pat Keating in the amount of €297,863 which represents unpaid bonuses between 2010 and 2017.

In response to the court action taken by Mr Keating against his employer concerning the unpaid bonuses, Mr Justice Sanfrey ruled that a failure by the port company directors to use their discretion to pay the bonus “constitutes a breach by the company of the contract which has caused damage and loss to Mr Keating”.

Mr Justice Sanfrey found that if the directors had exercised their discretion in a manner consistent with their fiduciary duty, “they would have authorised payment to Mr Keating of the Performance Related Pay (PRP) determined by the remuneration committee to be due to him in the period 2010 to 2016".

Mr Justice Sanfrey stated that the consistent position of the board from 2010 to 2016 was that it was in the best interests of the company that the CEO’s PRP be discharged.

Discretion

However, the board exercised its discretion not to discharge Mr Keating’s PRP “…only because of the instructions of the shareholder…” as it was the Government Minister’s position that PRP should not be discharged to CEOs of commercial semi-state companies was a “government policy concerning remuneration and employment”.

Mr Justice Sanfrey commented that “year after year, the directors expressed their strong wish to discharge Mr Keating’s PRP, which they considered he had earned and which had been 'awarded' by the remuneration committee”.

The judge said: “The only basis on which the PRP was not awarded was that the directors considered that they could not go against the clearly expressed wishes of the shareholders”.

Mr Justice Sanfrey stated that although the wishes of the minister and the department expressed in correspondence, were strongly advanced, they were not couched in terms that would constitute a “directive”.

He said that the policy not to discharge PRP was advocated by the Minister as shareholder of the company. Mr Justice Sanfry said that the minister is not a party to the contract between the company and Mr Keating.

He said: “In exercising their discretion not to pay PRP to Mr Keating year upon year, the directors were taking a course of action which they themselves considered was not in the best interests of the company, solely on the basis that this was what the shareholders wanted.” 

The written judgment records that in evidence, Mr Keating said that at the time of accepting the position of CEO, the pay “was only going one way and that pay included, without a question of a shadow of a doubt, PRP and basic salary”.

Mr Keating was appointed interim CEO in 2006 and was appointed to the position in 2008 on a permanent basis. For the years 2008 and 2009, Mr Keating’s bonuses were reduced to 17% and 9% respectively and in evidence he said that he was prepared to accept a reduction for those years at the request of the shareholders. 

However, Mr Keating was firm in his assertion that he never accepted that this reduction or non-payment of his PRP would continue indefinitely.