Semi-state chiefs face the sack in contracts row

THE boards of two semi-state companies have been warned to sack their chief executives if they refuse to sign revised contracts.

It follows a dispute with the Department of Agriculture over the chief executives’ ability to amass annual bonuses and their right to claim backdated awards.

Agriculture Minister Simon Coveney said the situation was “not acceptable”. It follows a lengthy standoff between his department and the bodies concerned, Horse Racing Ireland (HRI) and Bord na gCon.

In the case of HRI, the board reversed chief executive Brian Kavanagh’s voluntary salary cut of €15,573 in 2010 to compensate for his lack of bonuses during the economic crisis.

It also insisted on paying him €37,550 in outstanding bonuses despite “very strong” opposition from the minister’s predecessor, Brendan Smith, and his officials.

Meanwhile, Bord na gCon’s Adrian Neilan has been employed since January 2007 but has never signed a contract. This is because of additional clauses added to the standard contract for semi-state bosses.

Both boards were written to in March by secretary general of the department, Tom Moran, and told they should deliver a contract “without delay”.

He referred to guidelines which said: “In the absence of a signed contract the employment should be terminated.”

HRI’s Mr Kavanagh was paid a bonus of €43,111 for his work in 2008 but was due another €21,089 which is set to be paid this year.

The board awarded him another €57,000 bonus for 2009. He was paid €40,539 of this in 2010 and the remaining €16,461 was deferred until 2011.

Documents, released under the Freedom of Information Act, reveal that, last November, Mr Smith was briefed on Mr Kavanagh’s position and said the expectation that he would be paid accrued bonuses as “outrageous”.

HRI also clashed with the department regarding Mr Kavanagh’s salary, after the board reversed a voluntary cut to his €190,000 pay.

The board increased his salary by €15,573 to compensate Mr Kavanagh for a decision to forego bonuses from 2010 to 2012.

In Mr Neilan’s case, he was paid a bonus of €31,166 for 2007. In a recent letter to the board, Junior Minister Shane McEntee said that, under 2006 contracts, guidelines no bonuses should be paid without a signed contract.

Bord na gCon has denied a €15,000 training course he was sent on this year was in lieu of a bonus.

Both bodies confirmed contracts are still the subject of negotiations and neither man would claim a bonus for 2010, 2011 or 2012.

Mr Coveney said he expected the issue to be resolved “within weeks”.

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