Semi-State bosses cash in with bonus bonanza

SEMI-STATE bosses received bonuses averaging between €16,000 and €35,000 each on top of significant salary increases despite falling profits and thousands of job losses, an Irish Examiner survey reveals.

A survey of salaries and bonuses paid to the chief executives of semi-State companies over the past two years reveals that bosses at An Post, Aer Lingus, the ESB and Aer Rianta pocketed handsome pay increases and bonuses as profits nosedived.

Communications Minister Dermot Ahern said semi-State chief executives and not board members must be held responsible for the state of their companies.

"There are people in large organisations on big, fat salaries for doing a day-to-day job salaries way in excess of ministerial or indeed taoisigh salaries," he said.

Retired An Post boss John Hynes was paid a performance-related bonus of €27,000, despite spiralling losses. Up to 1,500 job losses are being sought by new boss Donal Curtin, who has cancelled all bonuses. The projected €50m losses are to be investigated by a Dáil Committee.

Although profitable again, Aer Lingus lost just under €140m in 2001 when the then chief executive Michael Foley's salary reached €567,000.

After Mr Foley left Aer Lingus with a termination payment of €656,000, 2,000 workers lost their jobs.

Other semi-State companies, whose bosses continued to received hefty bonuses despite faltering fortunes in the last two years, include Aer Rianta, whose boss John Burke received a performance-related bonus of €35,000 last year as pre-tax profits fell by 29% to €46.7m. This brought his total salary package to €315,000.

Profits at the ESB fell by €103m in 2001, yet then chief executive Ken O'Hara had a salary package of €363,851. On retirement he received a lump-sum of €436,573, in addition to pension and bonus payments.

Government policy on bonus payments is dictated by separate reports, both of which stress that any increases for semi-State heads must be dependent on "demanding objectives and searching performance reviews".

The Buckley Report of 1997 recommended chief executives should only get pay increases if they accepted revised contracts, which would include the possibility of dismissal if targets were missed. The 1999 Hay Report drew similar conclusions.

However, bonuses sanctioned by the Government came in at between €16,000 and €35,000 last year, regardless of whether the company actually made any profits.

SIPTU public service chief Michael Halpin said it would be wrong to ignore the longer-term picture but stressed "people in high posts should be accountable for their stewardship".

Communications Workers' Union head of regulatory affairs and employment law Michael Bride said workers should not be punished for a problem created by management.