In recent years, there has been a growing perception among the boards of several state business organizations that the government’s salary policy for senior executives is too restrictive.

In their submissions to an independent panel established by the government in 2022, a host of state-trading enterprises have called for more freedom and flexibility in setting pay rates for their top executives.

Some wanted the reintroduction of bonuses or performance bonuses.

The ESB, for example, argued that to attract and retain top talent, the company must offer “competitive and market-relevant remuneration for everyone in the organization, including the CEO.”

Health insurer VHI said it faces “significant risk” in recruiting and retaining staff based on state pay restrictions, compared to its industry equivalents.

Strict government controls on salaries at the highest levels in state trade agencies have been in place for more than a decade. Performance bonuses were banned in 2011 after the economic crash.

Public Expenditure Minister Paschal Donohoe earlier this year asked the newly established Senior Civil Servants Remuneration Committee to review the remuneration of state trading enterprise executives as a priority.

The group’s recommendations are awaited, but in recent months the government has had to tackle EirGrid’s salaries following the abrupt departure of its chief executive Mark Foley in April.

( Review of CEO compensation in STEs examines private sector ratesOpens in a new window )

Newly released files show EirGrid chairman along with Environment, Climate and Communications Minister Eamon Ryan have made strong moves to secure a pay rise for the chief executive position. Ultimately, they had to get Donohoe’s sanction.

The government then agreed to add a further €50,000 to the €250,000 salary of the chief executive of the company which develops, manages and operates Ireland’s electricity network.

On July 17, Ryan wrote personally to Donohoe asking him to “favorably consider” the request made by EirGrid chairman Brendan Tuohy to Ryan’s department for a higher salary for the role, highlighting the critical role played by the company in the electricity sector and its role. future role in the development of offshore wind energy.

The following day, Donohoe accepted a salary of around €300,000.

Pay in the state’s commercial sector can be a sensitive issue for ministers, as controversies over RTÉ pay and expenses last year showed.

Key decisions on top pay will need to be made by the next government when the Senior Pay Committee publishes its report, including whether bonuses should be allowed again.

Presentations from company boards to the independent panel in 2022 and representations to Donohoe over the summer show that these organizations believe existing arrangements are inadequate in the modern business world.