THE GOVERNMENT wants commercial State companies to clamp down on pay levels and bonuses paid to senior managers who are just below chief executive level.
The Government last year set a general pay ceiling of €250,000 for new chief executives of commercial State companies.
It also put strong pressure on the boards of such companies not to give performance-related bonuses to their chief executives.
However, pay for the second tier of management in such companies is determined by company boards and is not published.
Separately, it has emerged that performance-related bonus schemes are still in operation in some commercial State companies for senior management.
The Department of Public Expenditure has obtained details of bonus payments made to senior management below chief executive level in such companies as part of a review of performance-related award schemes currently in place.
In its submission to the review, the Department of Transport said it had been advised by the Irish Aviation Authority (IAA) that senior management in that company had contracts which provided for performance-related pay.
It said the IAA had argued that these bonus payments should be treated as confidential if the Department of Public Expenditure was considering releasing details of performance awards on foot of the review.
A spokeswoman for the IAA told The Irish Times that 15 staff members were eligible for its performance-related scheme.
She said payments had been accrued for last year and that the issue of payment was under consideration.
The IAA spokeswoman said the company did not receive funding from the State.
She declined to comment on the level of bonus payments made in recent years or which payments were due to be made.
The department said Minister for Public Expenditure Brendan Howlin was reviewing performance-related pay in commercial semi-State companies.
“While this review primarily focuses on chief executive officers of commercial semi-States, Minister Howlin expects boards to be mindful of the Government’s pay policy when setting remuneration for all future appointments of staff within the organisations, especially in management grades.”
Mr Howlin has written to all Ministers regarding pay levels for senior managers below chief executive level in commercial State companies which operate under their remit.
“As you know, significant progress has been made in relation to the level of salary to apply to the posts of chief executive officers in commercial State companies through the introduction of a general pay ceiling of €250,000 for newly appointed CEOs and the downward revision of the various salary ranges as previously determined under the Hay arrangements (the recommendations of a consultancy firm commissioned to examine top-level pay a number of years ago).”
Mr Howlin said that while he anticipated that the cuts applied to chief executive pay would, over time, give rise to corresponding adjustments to the salary levels of all staff in these companies, he asked Ministers to write directly to the chairs of the boards in commercial State companies operating under the aegis of their departments.
Mr Howlin said Ministers should request that the boards “ensure that, notwithstanding that the companies generate income through their commercial activities, cognisance is taken of Government policy on pay within the public sector when considering the remuneration of all future appointments of staff within the organisations and specifically to ensure that second-tier management remuneration is set at levels that allow for reasonable headroom between this tier and the revised levels to apply to the CEO posts”.
