A FUNDAMENTALLY different approach to determining the pay of chief executives of commercial State companies is to be introduced by the Government.
This follows the Cabinet's acceptance, in principle, of the recommendations of the Review Body on Higher Remuneration in the Public Sector yesterday.
Excluding chief executives, the report broadly recommends a 3 per cent increase across the board for members of the Government, judiciary, TDs and senators. The increases will only come into effect after the general election.
The Taoiseach's salary would rise by 2.9 per cent to £103,500, the Tanaiste's by 2.9 per cent to £89,000, while Ministers, the attorney general and the Ceann Comhairle would get £82,600, an increase of 3 per cent. The recommended rate for TDs is £35,400, a rise of 3 per cent. The salaries of senators would rise by 2.9 per cent to £22,400.
As already reported in The Irish Times, the report does not accept that a salary increase of 30 per cent, demanded by TDs, is "warranted" at this juncture.
The Chief Justice's salary will rise by 2.7 per cent to £103,500, the same rate as the Taoiseach, while a 3 per cent increase is awarded to Supreme and High Court judges, bringing their salaries to £89,700 and £82,600 respectively. Larger increases - more than 9 per cent - are recommended for circuit and district court judges because of the increased burden of family law cases on the lower courts.
The Garda Commissioner's salary will rise by 12.5 per cent to £77,316 while the Army Chief of Staff's pay will increase by 2.9 per cent to £70,750.
The review group recommends fundamental changes in the salary structure of the chief executives of the top 21 commercial State companies, such as Aer Lingus, Bord Gais, Bord na Mona, CIE, RTE and Telecom Eireann.
"These companies need to appoint and retain top-calibre executives to maximise the return to the State from its investment in, and ownership of, these companies, the report states. "Accordingly, they should be able to offer the type of rewards which their existing and potential competitors offer in order to recruit and motivate such chief executives."
The primary responsibility for determining a chief executive's remuneration should be assigned to the board of the company, according to the report, with Ministerial "sign-off" of board decisions.
The contractual terms of chief executives will be significantly changed, requiring a different approach by Government to board appointments and corporate governance.
The conditions of appointment for such chief executive will also be changed with the recommendation that individual chief executives should not serve more than seven years in total. The new contract provisions should apply in all cases, the report states. There should be no right to special leave or secondment, even if the chief executive is being appointed from within the organisation.
The pay structure for chief executives of the non-commercial State-sponsored bodies is also changed.
The report recommends a four-tier salary structure for Departmental secretaries of Government Departments to reflect differences in job size and complexity. This would involve an increase in basic salary for some, but not all, secretaries. The increases, averaging 3.8 per cent, would range from £91,500 for the Department of Finance to £77,316 for the Department of Equality and Law Reform.
The introduction of performance-related pay schemes for local authority managers and chief executive officers of health boards, as well as the up-dating of rates for consultants, are also recommended.
