Shannon Foynes Port Company (SFPC) CEO Pat Keating wants judgment for some €297,863 against the company over its failure to pay bonuses to him over a seven-year period to 2017, the High Court has heard.
Mr Keating told the court on Tuesday the commercial semi-State company has been very successful under his stewardship but he is the only senior manager not receiving performance-related payments (PPPs), which he considered a “core” element of his contract on becoming CEO in 2008.
Under that contract, his annual basic salary was €117,500, plus PPPs of up to 35 per cent, it is claimed.
In opposing the case, SFPC pleads the PPPs are discretionary and it was “entirely reasonable” not to pay them given “clear government policy at all material times that no bonus payments whatsoever” should be made to CEOs of commercial State bodies such as SFPC.
Opening Mr Keating’s action before Mr Justice Mark Sanfey on Tuesday, Clíona Kimber SC said his performance as CEO since 2008 has been consistently recognised as “excellent”.
He was paid a PPP in 2009 but, although SFPC’s remuneration committee has since then put aside PPPs for him in its annual accounts, Mr Keating has received none of those, she said.
The State is the major shareholder in the company and the PPPs for the CEO remained unpaid since the State, following the financial crash, implemented cuts in the public service and indicated it also wanted the commercial semi-State sector to cut back, she outlined.
The company’s failure to pay the PPPs to Mr Keating amounted to it unilaterally varying the terms of his contract and breach of contract, she argued.
Her side had not joined the State as a co-defendant because the core claim is that the contract is a binding one and the company must pay the performance element of it, counsel said.
The case concerns PPPs between 2010-2017. Mr Keating has taken separate proceedings over the continuing failure since 2017 to make such payments.
‘CEO’s excellent performance’
In evidence, Mr Keating said the performance-related element of his contract was a key factor in his decision to leave his permanent position of chief financial officer with the company and take up the CEO position.
Over his 10 years as CEO, the company’s different boards and chairs consistently described his performance as excellent and exemplary, he said.
SFPC, which gets no State funding, is now extremely profitable, having gone from loss-making pre-2006 to delivering profits of €3 million to €4 million annually and there has been a 30 per cent increase in shareholders funds over his tenure as CEO, he added.
Even in 2008, there was a sense the position of CEO of SFPC was underpaid and the company’s board was very concerned about that as it was felt they might not get the calibre of person necessary to run such a company, he said. The PPP element was a core part of the CEO’s financial package.
The CEO’s of the companies managing Dublin and Cork ports, which like Shannon are designated Tier One ports, receive higher salaries, the court heard.
Among various pleas in its defence, SFPC pleads PPPs are at the discretion of the remuneration committee and Mr Keating has no contractual entitlement to them.
Without prejudice to its general denials, it pleads the remuneration provisions of the CEO are subject to approval of the Minister for Transport, in consultation with the Department of Finance.
It pleads Mr Keating was only awarded 9 per cent of the possible 35 per cent bonus in 2009 due, inter alia, to government policy in relation to the payment of bonuses to CEO’s of commercial State bodies. Mr Keating, it claims, was aware, or ought to be aware, of that government policy, having regard to his contractual obligations of his service agreements and the company’s obligations under the Harbours Act. The case is listed for five days.
