Brian Lenihan: benchmarking review body

FINANCE Minister Brian Lenihan is to bring a memo to government this week with proposals on how best to proceed with cutting the pay of chief executives in the semi-state sector, the Sunday Tribune has learned.


It is understood Lenihan will recommend the establishment of a review body to assess and benchmark pay levels of semi-state bosses and quickly come back with recommendations.


However, the terms of reference of the review body will be crucial. While there has been strong criticism of pay levels of chief executives at the likes of ESB, the Dublin Airport Authority and Bord Gáis, the feeling in government is that, benchmarked against their private-sector counterparts or even the bosses of similar- sized state companies abroad, these rates are not out of kilter.


But with the government determined that highly-paid semi-state bosses do not escape the pay cuts that ministers and the entire civil service has been forced to endure, one solution would be for the review body to benchmark semi-state bosses' pay against secretary-generals of government departments.


"This is a very tricky one. It's very complex and messy," said one informed source.


"If you compared [semi-state bosses'] pay to equivalent sized companies in the private sector, the private sector chief executives are paid more.


"And chief executives [of state companies] in comparable countries are paid the same or more than in Ireland. However, if you look at the Department of Education, for example, it has a turnover of €6bn with a huge staff, yet the secretary-general's pay is just over €200,000 [a fraction of some semi-state bosses]".


It is expected that any review body would be asked to report back in a matter of months. It would be a much more "straightforward" exercise, because of the relatively small number of semi-states, than the recently completed review body on higher remuneration, sources said.