Irish CEO pay swells by up to 236%

Report calls for a new debate regarding top executives' earnings...

The Irish Congress of Trade Unions has called for reform regarding how top executive pay in private Irish companies is determined and structured.

The Congress believes companies and their remuneration committees and shareholders should have to take into account issues such as employee welfare, the environment and consumer satisfaction as well as financial performance when setting wage levels.

Calling for more diversity in the composition of company boards that determine executive pay, it calls for greater transparency generally with regard to pay.

The group argues that firms who secure large public contracts should be subject to even greater scrutiny in this regard - and that the mandate of the Low Pay Commission should be extended to monitor the relationship between average employee pay and the remuneration of their top bosses.

The call follows publication of a report, called "Because we’re worth it: The Truth About CEO Pay in Ireland" which focuses on the overall remuneration, including bonus and pension payments of the chief executives of twenty-one publicly quoted companies in Ireland over the last eight years.

It shows that while average wages are beginning to rise by about 2% per annum, chief executive remuneration has jumped in some cases by between 11% and more than 200% and that it would take many years for an average employee to earn the overall remuneration paid to people at the top.

Among the recommendations contained in the report are:
  • Greater transparency in the setting of top executive pay, with companies setting clear objective criteria relating to financial performance, employee welfare, consumer satisfaction and environmental protection;
  • Consider extending the mandate of the Low Pay Commission to monitor the relationship between high and low pay;
  • Companies award public contracts would be required to publish more details on pay and bonuses, along the lines set out in the UK’s Corporate Governance Code;
  • Consideration should be given to capping the relationship between executive pay and bonuses, while shareholder resolutions on pay should be binding;
  • Where a significant part of a company’s work is carried out by sole traders or agency workers, there should be a requirement on companies to report on the payments made in these categories;
  • Company boards should be more diverse and representative of workers, investors, women and pension funds;
  • A higher rate of tax should apply on incomes over €1 million per annum, with Revenue applying greater scrutiny to non-basic elements of executive pay.

One of its authours, Dr Peter Rigney joined Vincent Wall on Breakfast Business - he said that he hopes that this research will create a new debate and help Ireland move towards a more "equitable" society.