The statutory framework governing remuneration for CEO posts in Commercial State Bodies is set out in the relevant legislation governing each post. The Code of Practice for the Governance of State Bodies also provides that the CEO of each Commercial State Body shall hold office subject to the terms and conditions as determined by the Board of the State Body with the consent of the relevant Minister and the Minister for Public Expenditure and Reform.
Prior to 2011 the remuneration for CEO posts in Commercial State Bodies were informed by recommendations of the Review Body on Higher Remuneration in the Public Sector and reviews assessments undertaken by Hay Management Consultants.
11 years ago, in June 2011, in the context of the financial challenges facing the State in the midst of the economic crisis, revised ranges were introduced for new appointees to CEO posts in Commercial State Bodies at that time.
In 2014, with the enactment of The National Treasury Management Agency (Amendment) Act 2014 the Oireachtas set out a statutory role for NewERA (New Economy and Recovery Authority) to assist Ministers in the relevant Government Departments in fulfilling their statutory responsibility with regard to determination of remuneration for these posts.
The Act provides that NewERA “shall provide financial and commercial advisory services to a Minister of the Government… consisting of advice relating to… the remuneration of the chairperson, members, directors or chief executive” of a Commercial State Body.
Accordingly, since 2014 NewERA provide the relevant guidance for determination of remuneration for these posts when requested by the relevant Minister.
However, for the information of the Deputy, since February 2020 I have provided my consent to salaries above the range that applied in 2011 in respect of 3 CEO posts (Port of Cork, VHI, Horse Racing Ireland). In each case, in line with the framework for the posts and the statutory role of NewERA, the process involved the following:
- The Board made a determination as to the appropriate salary for the post and made proposals to the relevant line Minister in that respect;
- The relevant Minister with responsibility sought an assessment of the Board's proposal from NewERA;
- NewERA carried out an independent assessment of the salary proposed by the Board, and provided a recommendation in support of a salary above the 2011 range;
- The relevant Minister sought my consent to the terms;
I can confirm that in each case the terms agreed were determined in line with the relevant statutory framework, reflected recommendations of independent assessments undertaken by NewERA, and did not represent an increase on the terms of the outgoing CEOs.
As I recently outlined to the Committee on Finance, Public Expenditure and Reform, and Taoiseach, I intend to establish an external Review Panel to examine the current process for determining the terms and conditions of employment for senior posts. It is my intention to bring proposals to Government in the coming weeks on the Terms of Reference and membership of the Review Panel.
