A row has erupted between An Post and Minister for Communications Patrick O’Donovan over pay for its new chief executive and key elements of its development strategy.
The Irish Times understands directors at the commercial State company held a special board meeting last Friday and have written to O’Donovan setting out their concerns, which also include delays in Government authorisation to raise the company’s borrowing limit.
The board had proposed a salary rate of about €360,000 per year for the next chief executive of An Post, who will take over from David McRedmond in the coming weeks. The Irish Times reported last month that An Post was lining up Fergal Leamy, the former head of Coillte and Glen Dimplex, to become its next chief executive.
The remuneration proposal for the next chief executive was put forward under a new pay determination system by which boards in commercial State companies opt for a point on a pay band provided by the Government. Line Ministers, in turn, have to give formal approval for the proposed salary rate.
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However, informed sources said O’Donovan did not accept the €360,000 pay proposal and instead opted for a lower rate of about €270,000. This figure was endorsed by Minister for Public Expenditure Jack Chambers on June 9th.
McRedmond’s basic pay rate is set at about €250,000, according to the company’s most recently published accounts.
O’Donovan’s move to opt for the lower pay rate for the new chief executive is understood to have angered the An Post board, which held the special meeting on the issue last Friday as well as a regular meeting on Tuesday.
The board is also understood to be anxious for the Minister to authorise an increase in its existing borrowing limit, which has been set at €75 million since 1984, as well as approve plans for a centralised sorting office facility which it believes is key for its future development.
The Irish Times understands that in a letter to the Minister, directors of An Post maintained that the delay was undermining the board.
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The letter is also believed to state that An Post’s business was coming under increased pressure and that this left the board’s fiduciary duties and financial responsibilities in question.
O’Donovan confirmed this week that he had approved a new pay rate for the incoming An Post chief executive and expected a deal would be concluded imminently.
There is a concern at political level about the impact of authorising a higher pay rate against the backdrop of increased pressure on public service pay as the Government prepares to enter talks on a new deal with more than 400,000 State employees.
On Tuesday O’Donovan said his department had “spent a considerable amount of time” on the An Post pay issue. He said the issue was being considered in the context of “what I think we know are going to be testing times ahead in terms of pay demands across the public sector”.
In a statement on Wednesday, the Department of Communications, Culture and Sport said its Minister engaged with An Post on a range of matters on a regular basis.
“The remuneration level for the new CEO position in An Post is a matter for the board of An Post to consider. It would be inappropriate for the department or Minister to comment regarding the CEO position, until such time as An Post has made an announcement on the matter, given that it remains in a recruitment process,” the statement said.
“With respect to An Post’s statutory borrowing limit, the company has requested an increase to the limit, and this request is under consideration by the department.”
