Irish Water’s parent company Ervia looked for €250,000-a-year salary for new chief executive, €30,000 more than agreed

IRISH Water’s parent company Ervia looked for a €250,000 salary for its incoming chief executive despite being told the pay for the position had to be €30,000 less.

The appointment of former Bórd Na Móna executive Mike Quinn was eventually agreed with a pay package of €225,000, a hike of €5,000 on what had originally been agreed on by government.

A significant bonus of VHI health insurance for the candidate’s family was also included as part of the deal along with a car and pension entitlements.

Departmental documents obtained under FOI by Right to Know also show how Ervia, which runs Irish Water along with gas networks in Ireland, was having serious difficulties in finding a candidate for the job.

In January 2017, a €220,000 pay package was agreed by Minister Paschal Donohoe with the use of a car also provided for the role.

Health insurance would be available through a group scheme — however, the candidate was going to have to pay for it themselves.

In May however, Minister Donohoe was told by civil servants that following the recruitment process “a change to these terms” was needed.

A submission to Mr Donohoe said: “The revised package includes a salary of €225,000 and health insurance for the CEO, his spouse and his dependent children through the company’s group membership at the company’s expense.”

It also said the contract should be flexible regarding the nature of the role if unforeseen changes, including upheaval over Irish Water, ended up with any major restructuring of the group.

A note on the submission from Minister Paschal Donohoe says simply: “I agree.”

Internal records from the Department of Communications explain that 187 different candidates had been identified for the job originally.

However, many had withdrawn “due to the complex nature of the job” and what was described as a “significant gap in salary expectations”.

A briefing document explained: “Eventually six candidates were shortlisted with three progressing to the final interview. One of these withdrew due to the salary package on offer.

“The Ervia chairman has indicated that, following detailed psychometric testing, a standout candidate was chosen by the interview panel.”

After discussing terms with the candidate, Ervia decided that a salary package of €225,000 per annum plus the family health insurance would be required.

NewERA — a branch of the National Treasury Management Agency that offers advisory services to government — were asked to examine the proposal.

In their report, which has been withheld under FOI, they are understood to have agreed with the increased rate of pay.

The briefing document said: “Having considered the strong advice of the board [of Ervia] that they have one recommended candidate only, NewERA has recommended that reliance is placed on the Board’s assessment of the require remuneration terms and that the requested approvals are given.”

The views of Minister Denis Naughten were also sought and in May, he signed off on the enhanced deal.

The submission also explains how Ervia had originally wanted a quarter of a million euros for their candidate but had come back with a lower offer.

It said: “Ervia had initially sought an increase in the package to €250,000 plus VHI family insurance. Following further negotiation, it appears that €225,000 plus VHI family insurance will be acceptable to the candidate.”

In a statement, the Department of Public Expenditure said they agreed with Ervia that an improved package had been needed.

They said: “The Board of Ervia made a strong business case for the proposed terms and conditions. This was accepted by both the Ministers for Public Expenditure and Reform, and Housing, Planning, Community and Local Government.

“Under the circumstances, the Department is satisfied that the specific terms are appropriate for this post.”

They said that the salary range allowed for the post was between €190,014 and €238,727 and that the new chief executive, who will start in October, will be paid less than his predecessor.

Michael McNicholas, who had held the role, had been given a more generous salary “on an exceptional basis, reflecting the challenges for Ervia in establishing Irish Water as a subsidiary”, Departmental documents said.

In a statement, Ervia confirmed they had originally sought €250,000 for the new candidate and said the package eventually decided upon was “a matter for DPER [the Department of Public Expenditure]”.