The board of the ESB had “significant concern” that the salary for company’s chief executive was insufficient for retaining an appropriately-skilled person for the role, the Department of the Environment, Climate and Communications told a Government pay review group.
In an appendix to a submission sent by the then Minister Eamon Ryan last summer, officials said at that point the post of ESB chief executive had a salary of €318,000.
The department said it was “considered imperative that the company is led by a suitably qualified, experienced and dynamic leader and the post should be competitively remunerated accordingly to attract same”.
The department in its appendix to Mr Ryan’s letter to the Senior Posts Remuneration Committee said “due to the size and scope of ESB’s remit, the level of remuneration has been previously cited as an area of significant concern for the board of the ESB in retaining an appropriately-skilled CEO”.
“The chair of ESB has also noted the current salary as insufficient to attract the calibre of candidate sought for the role in comparison to alternative employment options available to them.”
The department said the ESB was “one of the country’s most valuable assets” as the largest semi-State company.
“Therefore it is critically important for the business to attract, retain and motivate the right calibre of people across all levels of the organisation to deliver on their strategic goals and to meet shareholders’ expectations in terms of decarbonisation, energy security, critical infrastructure provision and economic growth.”
It said the ESB chief executive at that point had a salary of €318,000. It said the code of practice for governance of remuneration in State bodies urged that pay at the top level should be set in a manner that allowed “sufficient headroom between the CEO and senior management”.
The department told the review group that “this must be considered in the context of the ESB”.
It said as of December 2023, the ESB had a regulated asset base of about €13.2 billion, comprising ESB Networks €10.6 billion, NIE Networks €2.6 billion, a 27 per cent share of generation in the all-island market and more than two million customer accounts throughout the island of Ireland and in Great Britain.
It said the ESB had provided more than €1.5 billion in dividends to the State over the previous decade.
Last month following the report of the remuneration committee, the Government signalled it would update rules to allow a “market rate” to be paid to chief executives in commercial State companies.
Minister for Public Expenditure Jack Chambers said the Government would implement most recommendations made by the committee.
He said the Government accepted the need to update a system for top-level pay determination in commercial State organisations that had been in place for more than a decade and would move to generally implement the recommendations.
He said the upper limit on any proposed package would be the market rate rather than 120 per cent of it. However, there would be no backdating of any increases to May 1st of last year, another committee recommendation, and no reintroduction of performance-related bonuses worth up to 25 per cent of salaries, which was also proposed.
