The average pay package of the 24 long-standing bosses of the largest Irish publicly-quoted companies rose by 11.2 per cent last year to €3.18 million as global equity markets recovered from a sell-off in 2022 and corporate earnings pushed higher, according to figures compiled by The Irish Times.
The figures include chief executives of Irish companies listed on the Iseq 20 index in Dublin, the FTSE 350 in London and companies that have moved their main listings to New York in recent years.
Each has been in their role for at least two years at the end of their company’s latest annual financial period in order to provide comparable remuneration figures. Some figures are skewed by some large stock bonus awards, which are heavily linked to share-price performance.
Global stock markets rallied by 20 per cent last year, measured by the FTSE All-World Index, helped as major central banks hit the brakes on rate rises and investors speculated on when they might start reducing borrowing costs as inflation eased. Dublin’s Iseq 20 advanced 24 per cent.
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Average salaries among the Irish top brass had fallen 10 per cent in 2022 as global equity markets put in their worst performance since 2008.
The median chief executive compensation package, which gives a better picture of the pay landscape as it eliminates the distorting effects of outliers on the pay scales, was €2 million last year. By comparison the median salary in the Republic stood at €41,824 in 2022, according to the latest available figures from the Central Statistics Office.
The pay outlook for top Irish executives looks positive so far this year, with global markets up 12 per cent and corporate earnings seen advancing by analysts.
Mr Average among Ireland’s big wigs on the pay front was one Eamonn Rothwell, chief executive of Irish Ferries-owner Irish Continental Group (ICG), who secured a remuneration package of €3.1 million last year.
But Rothwell is not your cookie-cutter Irish CEO. He has led his group for the past 32 years, three times the average on the list. The 69-year-old also finds himself still at the helm of a public company 17 years after making a failed attempt to lead a buyout bid to take it off the stock market. And he also stands out for holding an uncommonly large stake in the business he leads: 18.6 per cent. He collected €4.39 million of dividends on that holding last year.
The perennial leader of the Irish pay chart, Albert Manifold, retained his position last year as his remuneration jumped 17 per cent to $13.2 million (€12.2m), driven by stock awards and a cash bonus, as the building materials and services group’s earnings and share price jumped.
Shares in CRH soared 64 per cent over the course of 2023 in London on the back of earnings growth and as investors cheered its decision to move its main stock market listing to New York from the UK last September, which also resulted in it exiting the Irish stock market.
US-listed companies typically trade at a premium, relative to earnings, to companies quoted on exchanges in Europe. Eventual inclusion on the key S&P 500 stock market index should further boost demand for the stock, according to market observers.
The group also hinted in its annual report that it may soon seek more lucrative US-style pay packages for its senior executives, saying its “compensation structures will evolve to more closely align with US practices”.
Glanbia’s former managing director Siobhán Talbot was second on the list, earning €7.95 million in her last year in charge of the nutrition group, up 26 per cent on 2022. Glanbia, one of the world’s leading producers of protein powders for gym-goers and dieters, saw its net profit jump 20 per cent last year to $298.1 million last year, with its leading Optimum Nutrition brand generated $1.1 billion in revenue.
However, the Kilkenny-based group received the highest level of disapproval of a remuneration policy put by an Irish company to investors at an annual general meeting (agm) this year. Almost 28 per cent of votes were cast against its pay policy after Institutional Shareholder Services (ISS) and Glass Lewis, two influential investor advisory firms, took issue with chief financial officer Mark Garvey receiving a stock-based bonus worth €785,000 as an incentive to remain with the company for at least two years to support the new CEO Hugh McGuire – with no performance conditions attached.
Icon plc, one of the world’s biggest clinical research groups for drugmakers, which quit the Iseq 13 years ago as it moved its stock market listing to the Nasdaq in New York, has long had one of the best CEO compensation packages for an Irish company. Its chief executive Steve Cutler, a former international rugby player for his native Australia, ranked third on the list with a $7.24 million pot last year.
Paddy Power parent Flutter Entertainment’s CEO Peter Jackson was the fourth best paid executive last year, with a package of £4.54 million (€5.34m) as the group’s adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) jumped 45 per cent to $1.87 billion. This was helped by its fast-growing FanDuel sports-betting company delivering a positive Ebitda result for the first time.
Flutter ditched its Irish listing in January and moved its primary quotation from London to Wall Street in May. It also recently moved its operational headquarters to New York, reflecting the increasing importance of the US sports betting and iGaming market to the group.
Tony Smurfit received €4.72 million last year as chief executive of cardboard box-maker Smurfit Kappa, bookending the top five on the list. However, this was down 15 per cent on the previous year as the company’s earnings declined at almost the same pace amid a downturn in the packaging sector.
Earlier this month Smurfit became the third former Iseq heavyweight to desert the market in less than a year as it moved its main stock market quotation to New York following ts merger with US rival WestRock to create Smurfit WestRock. The enlarged group has a market value of over $24 billion and is now the biggest player in the industry globally.
The main advancer on the pay front was Darragh Lyons, the former chief executive of life sciences investment company Malin Corporation, whose total package jumped almost 150 per cent to €1.56 million as he secured an almost €600,000 golden parachute on leaving the business last December. Malin, the smallest player on the Iseq 20, with a market capitalisation of about €110 million, did away with the CEO role under the move as it focuses on selling down its portfolio and returning cash to shareholders.
Ryanair’s latest annual report, published late last month, showed that its boss Michael O’Leary’s pot rose 73 per cent to €4.68 million for the financial year to March. This came as his base pay more than doubled to €1.2 million and the budget airline booked a higher accounting charge – of €2.87 million – relating to the potential cost of a massive share options plan.
The group’s head of three decades will benefit from a €100 million bonus in stock options if its share price breaches and remains above €21 for 28 days in a row by the end of 2028 – or its annual net profits hits €2.2 billion.
Ryanair stock briefly peeped above €21 for a few days in April. However, it has since slumped by more than a third, with the sell-off accelerating earlier this week as the carrier’s latest quarterly profit missed analysts estimates and O’Leary warned he expects air fares for the remainder of the summer to be “materially lower” than the same period last year.
Dalata Hotel Group CEO Dermot Crowley saw his compensation package rise 76 per cent last year to €2.06 million thanks to improved bonuses.
Elsewhere, the head of Cairn Homes Michael Stanley received a 72 per cent pay bump, to €1.94 million, driven by a stock award of €817,000, under a 2021 incentive plan. Some 32 per cent of shareholders in the home-builder voted against a follow-up CEO incentive plan – worth €7 million if the company reaches certain performance targets – put before them in an extraordinary general meeting last August. While Cairn acknowledged the high level of disquiet and subsequently engaged with investors on the matter, it has not changed path on the plan.
Proxy advisory firm ISS said in a report ahead of Cairn’s agm in May that while the company’s “response to shareholder dissent might not be considered wholly adequate” it acknowledged that “decisions of this nature are difficult to reverse”.
Ongoing crisis-era pay caps on Irish banks left AIB chief Colin Hunt and his counterpart at Permanent TSB Eamonn Crowley near the bottom of the remuneration list last year – at about €600,000 each, including pension entitlements.
While the Government’s take fell below 50 per cent last summer and currently stands at a little over 25 per cent, lobbying by AIB to be freed up to set its own basic salary for executives – even as bonuses above €20,000 continued to be effectively banned by a prohibitive 89 per cent tax rate – continues to fall on deaf ears.
The shackles were removed at Bank of Ireland at the end of 2022 – at least when it comes to setting fixed pay – after the State sold its remaining shares in the lender. The bank’s current head Myles O’Grady received a €1.07 million pay package last year. (He is not on this year’s CEO pay list as he only took charge of the bank in late 2022.)
O’Grady is in line for a large increase this year as he receives a stock award equivalent to 25 per cent of his salary, increasing to 50 per cent from 2025. He is not alone. Other senior executives are also in line to benefit from new so-called fixed share awards. As there are no conditions attached – other than the beneficiaries remaining in employment at the bank – they are not affected by the Government cap on performance-related bonuses.
Across the Irish Sea, Pascal Soriot, the chief executive of pharmaceuticals group AstraZeneca was the top earner last year among FTSE 100 chiefs, raking in £16.9 million – two-thirds more than Manifold, the top of the heap in Ireland.
But Wall Street remains the home of supersized pay packages.
The highest paid executive of a public company globally last year was Jon Winkelried, CEO of US investment firm TPG. The former Goldman Sachs banker’s total compensation last year was $198.7 million, according to data compiled by executive data firm Equilar and the New York Times.
This is based on a traditional pay calculation, comparable to how our Irish list has been compiled, which looks at basic salaries, value of new shares and options granted in a given year, and other perks, from a company car to pension contributions.
It differs from a new compensation calculation – known as compensation actually paid (CAP) – introduced by US market regulators in recent years, which requires companies to also disclose recent changes in the value of current and potential stock holdings.
On a CAP basis Tesla CEO Elon Musk was the highest earning executive, reaching $1.4 billion. On paper at least. That’s because it is based on an increase in the value stock options tied to a multibillion dollar pay agreement reached in 2018 but which was cancelled by a Delaware court in January. Tesla shareholders voted last month to restore the total $44.9 billion (previously worth $56 billion) package. But it is set to remain tied up in US courts for months as Tesla tries to overturn the rejection.
Musk’s compensation under the traditional method last year: zero. He hasn’t received new stock awards or bonuses from Tesla since 2018 and hasn’t drawn a salary since the following year.
Under traditional pay metrics the Carlyle Group investment giant is the US’s CEO Harvey Schwartz, who received the second highest package at $187 million. Finishing off the top three was Hock Tan, the head of US chip designer Broadcom, who earned $162 million.
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