A ROW is brewing between Minister for Transport Leo Varadkar and the Dublin Airport Authority (DAA) over a decision by the board of the State company to award a performance-related bonus of €106,100 to its chief executive Declan Collier for 2010.
Payment of the bonus has been deferred with the agreement of Mr Collier until he completes his seven years as chief executive in April 2012.
The DAA’s latest annual report, published yesterday, shows Mr Collier’s total remuneration rose by 7.8 per cent last year to €612,500. This included a salary of €308,500 and pension contributions and other benefits totalling €182,100.
In 2009, Mr Collier was paid €568,100, which included a salary of €320,400 and bonus payments of €50,900.
The Minister said yesterday he was “very dissatisfied” the DAA’s board had made a provision for a “substantial” performance-related payment for Mr Collier.
“The Minister is aware that the payment of this has been deferred, but it is the Government’s clear policy that no performance-related payments should be made in respect of 2010,” a spokesman for Mr Varadkar added yesterday. “All of the Government’s agencies would be expected to comply with this. In recent days, the Minister has also written to the company secretary in the absence of a chairman in these terms.”
A DAA spokesman said its board was “aware” of the Minister’s position. It is understood the board felt it was legally obliged to provide for Mr Collier’s payment as it was a potential liability for the company. The award was based on the terms of Mr Collier’s contract.
It is not clear how this award to Mr Collier came to be made given that the corporate governance compliance statement in the DAA’s annual report states that the remuneration of the chief executive is “subject to the approval of the nomination and remuneration committee and the Minister [for Transport”.
The DAA declined to comment on this but a spokesman for the Minister said: “It is not in the power of the Minister to sanction or refuse a performance-related payment.”
Mr Varadkar met collectively with the chairmen and chief executives of all the State agencies shortly after taking office and told them bonuses should not be paid until the Government had reviewed the issue in the context of the country’s economic difficulties. Neither the then DAA chairman, David Dilger, nor Mr Collier attended that meeting although a representative of the company was present.
Tension with the Minister over this payment to Mr Collier is believed to have been one of the reasons why Mr Dilger stepped down suddenly as DAA chairman on May 13th, the same day that he and fellow director Peter Barrett signed off the company’s accounts for 2010.
The DAA returned to the black last year, posting a profit of €33.1 million. This compared with a loss of €13.3 million in 2009, when it booked exceptional costs of €46.5 million relating to a cost restructuring programme.
Turnover rose by 11 per cent to €558 million, aided by increased aeronautical fees, while the profit contribution from duty free operator Aer Rianta International rose by 40 per cent to €18.8 million.
Dublin, Cork and Shannon airports all recorded double-digit declines in passenger traffic. Overall, this traffic fell by 13 per cent to 22.6 million.
Dublin airport recorded a decline of 10 per cent to 18.4 million; Cork was down 12 per cent to 2.4 million; and Shannon was 37 per cent lower at 1.8 million.
The DAA’s net debt rose to €765 million last year from €616 million in 2009. This reflects costs associated with the construction of Terminal 2 in Dublin.
