McGrath: Cap bosses’ bonus and pensions

LUCRATIVE bonuses and pension deals should be included in the proposed €250,000 salary cap for semi-state chief executives.

This is according to the Fianna Fáil backbencher who instigated internal Government calls for the introduction of the pay limit.

Michael McGrath said the salary threshold, which is expected to be revealed in the budget this afternoon, should encompass the whole remuneration deal for semi-state bosses and not just the basic pay cheque.

He said it should be enforced on existing chief executives and not be confined to new recruits. “If you then pay generous bonuses and pensions packages, soon the overall package is heading towards €400k again. That would defeat the purpose. Perks associated with the position should be monitored tightly.”

Mr McGrath said it was important that, if people on basic social welfare payments suffered, the best-paid public sector workers had to take the hit. But the move had come too late, he said.

“This curtailment should have been done two years ago and I fear that it is too little too late, but I welcome it nonetheless,” he said.

Mr McGrath’s comments came after the chief executive of Bord Gáis, John Mullins, indicated he would return to the private sector rather than work under the proposed semi-state salary cap. He said he had no problem with his salary being benchmarked with private companies but, if the cap was in place when his contract ran out in two years, he would most likely leave the energy supply company.

Mr Mullins said his salary was in the region of €250,000. Bonuses and perks bring his annual package to €394,000. He said this had to be viewed in the context of the size of the company he managed and, if Bord Gáis was privatised, it would be worth in the region of €2 billion.

He told RTÉ if the Government wanted to attract the people with the skills needed to run large commercial companies it had to have flexibility in pay.

Individual ministers have often sought to breach salary guidelines to hire the desired candidates for commercial semi-states. When the Department of Health looked to appoint Jim Tolan as head of the VHI, Health Minister Mary Harney lobbied, but failed, for a deal worth €705,000.