Varadkar wrong on pension, says Aer Lingus chief Mueller

Outgoing Aer Lingus chief executive Christoph Mueller has said the Government's decision to vote against his pay package this year on the basis of a large increase in his pension payment was based on poor research.

In May, the then minister for tourism Leo Varadkar took the highly unusual step of using the voting rights associated with the State's 25 per cent stake in Aer Lingus to oppose executive pay arrangements at the airline at its annual general meeting for shareholders.

This was in protest at an increase in Mr Mueller’s pension payment (it rose to €175,000 last year from €119,000 in 2012) at a time when the airline was negotiating with staff to reduced the benefits in their pension scheme.

The Department of Transport said it was “totally inappropriate” given the “serious problems” in the staff’s scheme.

In an interview with The Irish Times business podcast, published on irishtimes.com today, Mr Mueller said that while the row over his pension was an "interesting event" for the media, "in all honesty, I have to say that the research was not done correctly". He said: "The entire thing is rooted back in 2011 when I had earned a very significant bonus due to the Greenfield [cost cutting] programme. I deferred that voluntarily. The fact of the matter is that since I arrived here in Ireland [in 2009] I have not paid a single penny into the pension scheme.

“I have taken it out normally as salary and have taxed it with the full 52 per cent of income tax. The entire story is much easier to understand if you read the [annual] reports from 2013, ’12 and ’11,” he said.

When asked specifically if the Government has misinterpreted his remuneration, Mr Mueller said: “Yes.”