Reform how bosses’ pay is decided, say unions
Trade unions have called for major reform of how the pay of executives is set in quoted companies and semi-states.
The Irish Congress of Trade Unions wants more transparency around how the remuneration of top bosses is arrived at, a limit on bonuses and a higher rate of tax for those earning more than €1m a year.
It comes as it emerged that CRH chief executive Albert Manifold’s pay package hit an Irish record of €10m last year, driven by a share bonus payment tied to awards made three years ago.
And Greencore has promised to re-engage with investors on the remuneration of chief executive Patrick Coveney after 40pc of those who voted at a meeting rejected the company’s move to double the maximum long-term share bonus he can get.
One of the world’s leading proxy advisory firms, Institutional Shareholder Services (ISS), had advised investors ahead of the agm to vote against the new remuneration plan.
Now the Irish Congress of Trade Unions has conducted a study showing that weekly earnings for workers went up by just 2pc in the past few years.
In contrast, executive pay in some companies rose by up to 238pc between 2009 and 2015.
The leading companies quoted on the Irish Stock Exchange and large semi-states such as the ESB, VHI, Dublin Bus and Ervia were looked at in the research.
Author Dr Peter Rigney said the issue of executive pay got very little attention in this country.
“A challenge to the composition and fairness of high executive pay is long overdue. After all, it appears that top pay is always affordable, while pay at the lower end is wide open to challenge, be it in terms of the minimum wage or the rates set by Joint Labour Committees.
“We believe companies should be required to take into account issues such as financial performance, employee welfare, the environment and consumer satisfaction when deciding on top pay.”
The report recommends that there should be greater transparency in the setting of top executive pay. Companies should set out clear objective criteria relating to financial performance, employee welfare, consumer satisfaction and environmental protection.
Consideration should be given to extending the mandate of the Low Pay Commission to monitor the relationship between high and low pay, Congress said.
Companies awarded public contracts would be required to publish more details on pay and bonuses, along the lines of the UK’s Corporate Governance Code.
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