The board of the National Asset Management Agency is considering setting up an incentive scheme for employees to stem the haemorrhage of skills to the private sector as the Government prepares to impose pay cuts of about 10 per cent on the agency's employees as part of the Haddington Road deal.

In an interview with The Irish Times yesterday, Nama chairman Frank Daly said this plan is at a "preliminary" stage.

“You would look at an alternative incentive scheme that would have some element of retention built into it,” Mr Daly added.

In Nama’s annual report, published yesterday, chief executive Brendan McDonagh said 10 per cent of its staff had left in 2012 and that the agency’s inclusion in the “public sector [pay] adjustments is certainly a concern in terms of our ability to retain and allocate the correct skillsets to manage the portfolio”.

'Government's dilemma'
Mr Daly said: "I can understand the Government's dilemma. The country demands a certain level of contribution to our recovery from the public sector."

However, Nama staff were on fixed-term contracts and do not have the normal pension rights that go with security of tenure, he said.

“In essence, the more successful the staff are [at their tasks] the more quickly their jobs disappear. So that brings its own challenge in motivation and morale. I have to say the staff have been extraordinarily effective to date and the results show that.”

Nama's staff are employed by the National Treasury Management Agency and seconded to the agency. Nama's salary costs last year amounted to €27 million. It had 224 staff at the end of 2012, which suggest they earned an average €120,535.

In the previous year, Nama’s staff costs were €20.9 million. It closed the year with 202 employees, suggesting average earnings of €103,465.

Nama reported a profit after impairments, tax and dividends of €228 million in 2012. This compares with a surplus of €241 million in the previous year. Nama said it was on course to pay down €7.5 billion in senior debt by the end of 2013, as per its original target.

This would represent a quarter of the funding Nama raised to purchase problem loans from five Irish banks three years ago.

The agency has generated €12 billion in cash to date, including €7.9 billion from asset disposals. In the first five months of this year, it has generated €1.4 billion in asset sales.

The impairment charge on its assets amounted to €518 million in 2012, which was 60 per cent lower than the previous year. The total impairment charge on its loan portfolio to date is €3.26 million.

Mr McDonagh said it was another year of “substantial progress” for the agency.

Nama said it has granted 96 per cent of applications for rent abatements from commercial tenants, foregoing €14 million in the process.

More than 4,200 residential properties have been identified for potential social housing, while it has approved €4 million for remediating unfinished housing developments.

It is collecting about €100 million a month in rental payments from debtors. Mr McDonagh said two-thirds of its debtors are co-operating with the agency.

Nama said "significant preparatory" work is under way to deal with the potential transfer of the €26 billion loan book of Irish Bank Resolution Corporation, which is currently in liquidation.

Minister for Finance Michael Noonan said Nama can play a "big part in restoring the development and construction sectors in the country" and praised the agency's financial performance.

Mr McDonagh was paid €388,164 in salary and benefits in 2012, down from €454,483 in the previous year.