How much do Ireland’s top agri-sector CEOs earn?

It would take an average dairy farmer 40 years to earn what the CEO of Kerry Group made in 2016, according to the findings of a new report.

The study, carried out by the Irish Congress of Trade Unions (ICTU), focuses on chief executive salaries at 20 of the biggest companies on the Irish Stock Exchange; plus seven Irish-based companies listed on the London Stock Exchange in 2015 and 2016.

Titled ‘Because We’re Worth It – The Truth about CEO pay in Ireland’, the report highlights that some CEOs received pay rises of up to 100% over the two-year period.

When bonuses are taken into account, the average total CEO pay – across all sectors and industries – in 2016 was €2,099,769. This figure is down marginally on the 2015 average, which stood at €2,080,192.

The ICTU report found that bonus payments were awarded to the vast majority of CEOs (and many senior officers). Bonuses were paid in cash, shares or a combination of both.

Total remuneration

Total remuneration increased in 16 out of the 27 companies – ranging from 2% to 100%.

However, at 10 companies total CEO payment in 2016 decreased from 2015 levels – the decline ranged from -12% to -49% – with one company unchanged.

From a farming perspective, six agri sector companies – with a mixture of prominent and partial links to agriculture – feature on the list, including: Origin Enterprises Ltd; Greencore; Total Produce; Kerry Group; Glanbia; and FBD.

In 2016, the former CEO of Kerry Group – Stan McCarthy – received a basic payment of €1,306,000; however, his total remuneration for the year was €3,609,000.

The report highlights that cash bonuses to McCarthy in 2016 were €910,000 – up from €685,000 in 2015.

In 2016, Glanbia CEO  – Siobhan Talbot – earned €761,000; however, her total remuneration for the year was €2,029,000.

The report indicates that Talbot received €574,000 in cash bonuses in 2016 – a slight increase from €563,000 in 2015

In 2016, FBD CEO – Fiona Muldoon – earned a basic payment of €450,000; however, her total remuneration for the year was €898,000.

The report indicates that Muldoon, who was appointed to the position in October 2015, received a cash bonus of €315,000 in 2016.

In 2016, the CEO of Greencore – Patrick Coveney (brother of Tanaiste Simon Coveney) – earned a basic payment of €789,000; however, his total remuneration for the year was €3,258,000.

The report finds that Coveney’s cash bonus in 2016 was €491,000 – up from €427,000 in 2015

In 2016, the CEO of Origin Enterprises Ltd – Tom O’Mahony – earned a basic payment of €500,000; however, his total remuneration for the year was €701,000. The report shows that O’Mahony did not receive a cash bonus in 2016.

In 2016, the CEO of Total Produce – Rory Byrne – earned a basic pay of €512,000; however, his total remuneration for the year was €736,000. The report shows that Byrne received a cash bonus of €205,000 in 2016 – down from €320,000 in 2015.

According to the report, executive pay is decided by a Remuneration Committee (often referred to as a Compensation Committee) of the company board. This committee decides on the total remuneration package for the executives in the company, including: salaries; variable remuneration; pensions; other benefit provision; and any termination of office settlements.

The Remuneration Committee also sets the fees paid to board members.

Image source: ICTU report

Gender diversity

The study also looks at the issue of gender balance, highlighting that of the 27 companies researched, there are only two female CEOs – both located in the agri sector – in FBD and Glanbia.

However, of the 18 directors at Glanbia – just one is female; of the 12 directors at Kerry Group – just 2 are female; of the 11 current directors at FBD – just three are female; of the eight directors at Greencore – just two are female; and of the nine directors at Origin Enterprises Ltd – just three are female.

According to CSO figures, average earnings for 2016 were €36,900. As such, the report suggests that it would take the average earner around 98 years to amass what the CEO of Kerry Group earned in 2016.

With average dairy farm incomes for 2017 calculated at an estimated €90,000 by Teagasc, this means it would take the average dairy farmer at least 40 years to earn what the CEO of Kerry Group earned in 2016 alone.

The most striking comparison from the list indicates that it would take the average worker 270 years to earn what Albert Manifold, the CEO of building materials group CRH, earned in 2016.

The report concludes by noting that the issue of CEO pay is part of the debate on corporate governance, adding that Ireland “lags behind” the UK and other major EU countries.

However, it says there are signs that the debate is “beginning to take off” in Ireland.

The pace of change on this issue, while glacial, is being driven by forces outside Ireland. These forces will intensify over the next few years.

“The recent takeover of the Irish Stock Exchange by Amsterdam-based Euronext will further increase the pressure on corporate governance standards on Irish companies,” the report concludes.

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