The average pay package of the 19 long-standing bosses of the largest Irish publicly-quoted companies dropped by 10 per cent last year to €2.84 million last year, as global stock markets put in their worst performance since 2008, according to figures compiled by The Irish Times.
The figures include chief executives of Irish companies listed on the Iseq 20 index in Dublin and FTSE 350 in London that had been in their roles for at least two years as at the end of their companies’ latest annual financial period. Some figures are skewed by some large stock bonus awards, which are heavily linked to share-price performance.
The final list was compiled after Ryanair this week filed its annual report for the carrier’s financial year to the end of March.
Shares globally, measured by the MSCI All Country World Index, declined by almost 20 cent last year, while the Iseq 20 index slid nearly 18 per cent.
The median chief executive compensation package, which gives a better picture of the pay landscape as it eliminates the distorting effects of outliers on the pay scales, was €1.61 million. By comparison the median salary in the Republic stood at €41,222 in 2021, according to the latest available figures from the Central Statistics Office (CSO).
The outlook is looking brighter for Irish executives on the pay front this year as corporate earnings are forecast to generally increase, while the Iseq 20 has surged 24 per cent over the first seven months of 2023. Global shares have rallied by 16 per cent over the period.
CRH chief executive Albert Manifold retained his long-held position as the top-paid executive on the Irish list last year, even as his remuneration package dipped by 13 per cent to €12.1 million as company contributions to his pension fell and a weak performance by the building material giant’s share price reduced stock awards under his incentive plan.
Shares awarded to Manifold under a long-term incentive scheme declined 21 per cent to €6.82 million, the result of CRH share price weakness amid concerns about the global economy, widespread inflation and impact of central bank rate hikes on both sides of the Atlantic.
However, Manifold, who is contracted to remain with the building materials giant until late next year when he reaches 62, is poised this year to drop off the Iseq 20 and FTSE 350 list of Irish companies used for this pay league as CRH moves its main stock market listing to New York from September. The company is dumping its Irish quotation and downgrading its London listing, which is expected to see it drop out of key FTSE indices.
Siobhán Talbot, Glanbia’s CEO for the past decade, saw her pay package soar 71 per cent to €5.99 million to take up the second position on the list as her performance-related pay more than doubled as the nutrition group’s net profit jumped 53 per cent to €256.8 million.
Last year also saw the group’s Optimum Nutrition stable of protein supplements for gym-goers and athletes become the company’s first billion-dollar brand.
Cardboard box maker Smurfit Kappa chief executive Tony Smurfit’s compensation declined 7.5 per cent last year as demand for packaging fell back from the highs of the pandemic, and companies that make everything from breakfast cereals to TVs eased off on orders for boxes amid the cost-of-living crisis. Still his €5.99 million package was enough to retain the third spot on the table.
Flutter Entertainment boss Peter Jackson’s remuneration declined by 44 per cent last year to £4.07 million (€4.68m), with his bonus pot hit by the company’s failure to reach an earnings target for its business outside the US.
Glass Lewis, a major shareholder advisory firm, urged shareholders ahead of the company’s annual general meeting in April to vote against its new executive remuneration plan that could see Jackson earn as much as £19.6 million – or 1,600 per cent of his base salary.
However, the parent company of Paddy Power managed to secure the backing of over 90 per cent of shareholders at the meeting, with the help of the board’s strong defence of the move. Group chairman Gary McGann had highlighted at the time how Flutter’s market value had trebled since Jackson took in the chief executive role in 2018, while “total shareholder returns have significantly exceeded the average returns of the FTSE 100″.
Kerry Group chief executive Edmond Scanlon closed off the top-five highest earners with a pay package of €3.9 million, little changed from the previous year.
The biggest annual pay jump was enjoyed by Irish Continental Group’s (ICG) chief executive of more than three decades and its biggest shareholder Eamonn Rothwell. His package soared 245 per cent to €2.93 million as the parent of Irish Ferries returned to profit after the pandemic and expanded its fledgling Dover-Calais route in the wake of Brexit.
Rothwell also collected €4.28 million of dividends on his 17.7 per cent stake last year as the company handed out €24.2 million of such payments to shareholders, including an interim dividend for 2022.
The company posted almost €67 million of operating profits last year, following two years of losses, as revenues rebounded sharply on the back of an easing of Covid travel restrictions.
Glenveagh Properties CEO Stephen Garvey’s compensation jumped by almost two-thirds to €1.61 million as his basic salary was hiked by 33 per cent to €600,000 and his bonus doubled to €900,000. The housebuilder delivered 1,150 new homes last year, up almost 50 per cent on 2021.
The pay package of Gavin Slark, former chief executive of Grafton Group, declined by 73 per cent to £790,000 (€910,000) as he forfeited his right to a bonus after announcing that he was stepping down at the end of 2022. He subsequently took up the role of CEO of UK-based insulation and construction products distributor SIG.
Still, London-listed Grafton, owner of the Woodie’s DIY retailing chain and the Chadwicks builders merchants network, courted opposition from a group of shareholders at its agm earlier this year against the £740,000 salary it granted Slark’s successor Eric Born. Almost of fifth of investors who voted at the meeting cast ballots against the starting salary of the former Olympian, who represented his native Switzerland in men’s half-lightweight judo event in the 1992 Barcelona games. His basic pay is almost 18 per cent higher than Slark’s and, according to Glass Lewis, about €100,000 above that of UK peers.
Kingspan boss Gene Murtagh’s package fell by almost 50 per cent to €2.9 million as the insulation manufacturing giant’s share price slumped at the same pace amid investor concern about inflation and the state of the global economy. However, the outlook for Murtagh’s bonus award currently looks considerably better for this year, with the share price having rallied almost 40 per cent so far in 2023. This was helped as the group surprised the market earlier this month by upgrading its first-half profit guidance.
Ryanair’s Michael O’Leary saw his compensation package remain fairly steady at €2.71 million last year. This included an annual €1.78 million non-cash charge the carrier has been booking in recent years relating to the potential cost of a massive share options plan for the CEO.
O’Leary, who has been group chief executive since 1994, extended his contract last December by a further four years to 2028, in a deal that also pushed out the lifespan of the share options scheme. It is potentially worth €100 million and was originally due to expire next year.
The terms of the of the lengthened contract also saw his base pay jump from the start of April to €1.2 million a year from €500,000 – but his maximum potential annual bonus has been scaled back to 50 per cent of salary from 100 per cent previously.
Meanwhile, his 3.9 per cent holding in Ryanair is currently worth about €700 million. This leaves him in second position, however, on the league table of valuable stakes held by individuals in Irish companies.
Kingspan founder Eugene Murtagh, who stepped down from the company’s board in 2021, continues to hold a 14.9 per cent interest in the business, worth €1.9 billion. The value of the most recently disclosed shareholding – just under 2 per cent – that Paddy Power co-founder David Power has in Flutter is about €600 million.
Continuing crisis-era pay caps on Irish banks left AIB CEO Colin Hunt and his counterpart at Permanent TSB Eamonn Crowley at the bottom of the remuneration list last year – at about €600,000 each, including pension entitlements.
However, Bank of Ireland’s new chief executive, Myles O’Grady, who succeeded Francesca McDonagh at the helm of the lender late last year, is set to see his compensation rise significantly in the coming years after the State sold off its remaining shares in the company.
O’Grady was installed in the position in November on a fixed salary of €960,000 – in line with his predecessor.
A move by the Government since then to lift pay restrictions at the bank saw its board outline a plan to increase O’Grady’s package by as much as 50 per cent over the next few years through the awarding of shares in the company. As no performance conditions will be attached to the stock the move gets around an ongoing effective ban on bonuses above €20,000 across the remaining three retail banks in the State.
While there had been an expectation that Minister for Finance Michael McGrath would also lift pay limits at AIB after he lowered the Government’s stake in the bank below the key 50 per cent threshold last month, he has said that he has no immediate plans to do so.
WALL STREET
The US remains home to the most eye-watering CEO compensation packages for listed companies on the planet.
Stephen Schwarzman, the head of private equity giant Blackstone, took pole position last year with a total package of $253 million (€229m), according to research from executive pay analytics company C-Suite Comp, published first in the Wall Street Journal earlier this month. Three-quarters of his pay came from a share of the profits of Blackstone investments – or what is known in the industry as carried interest – and incentive fees.
Sundar Pichai, the CEO of Google parent Alphabet, received a package of $226 million last year, while car hire firm Hertz’s head Stephen Scherr had the third largest compensation deal, at $182 million, mainly made up of restricted stock units that will vest into shares over the coming years.
Of Irish interest, Steve Cutler, the CEO of clinical trials group Icon, was the best-paid head of a Dublin-based but US-listed company last year, with a compensation package of just over $10 million, up from $9.6 million in 2021.
