Coillte fought department to pay bonuses to CEO

Details have emerged of an extraordinary row between Coillte and the Department of Agriculture over the forestry company’s effort to pay its departing chief executive back-dated bonuses.

Last March, Coillte decided to pay David Gunning bonuses that were stopped because of the recession. The move was blocked at the last minute following the angry intervention of the department.

It is not known how much Coillte had decided to pay. His maximum entitlement would have been close to €385,000.

At the time, Mr Gunning was in the final weeks of his contract after turning down a second term. He is currently suing Coillte for the unpaid bonuses.

Contractually, he could earn annual rewards of up to 35% of his €265,000 salary (€92,000). Agriculture Minister Simon Coveney, and his predecessor Brendan Smith, vetoed the payouts.

Coillte protested and in 2011 paid Mr Gunning an extra €56,000 in defiance of a ministerial instruction.

The four-year spat peaked last March when the department’s most senior forestry official, assistant secretary general Kevin Smyth, suggested the company had deliberately planned to keep him from a key remuneration committee meeting.

This had been arranged to consider the CEO’s rewards for 2009, 2010, 2011, and 2012, as Mr Gunning was due to leave within weeks.

Mr Smyth and company chairman, Brendan McKenna, were the only two members of the remuneration committee at the time. However, on Mar 5, 2013, the two-person committee appeared to make a decision to pay out without him.

Four days before Mr Gunning’s departure, Mr Smyth wrote to the company secretary to correct the record of the meeting and demand Coillte stop the payments.

“There is no question of the chairman being mandated by the board to unilaterally authorise performance-related payments in the absence of the minister’s representative... I had clearly stated the minister’s position in relation to the awarding of performance-related pay namely that they should not be paid in the current economic circumstances.”

In documents released under the Freedom of Information Act, Mr Smyth told Coillte’s company secretary he had serious misgivings about how it conducted itself on this matter.

In a statement Coillte said no bonuses were paid but as the matter was the subject of a legal challenge it felt it was not prudent to comment. The department said its actions were based on Government policy.