The salary of the boss of Coillte was reduced from a maximum of €312,000 to €191,000 for a new appointee in 2011
It is no secret that some of the chief executives of semi-state companies and their board were less than happy with the salary caps which were introduced by Public Expenditure Minister Brendan Howlin three years ago.
One of those was state forestry body Coillte whose former chairman said the restriction would inhibit it from attracting a sufficiently qualified CEO.
In 2011 Brendan Howlin reduced the salary of the boss of Coillte from a maximum of €312,000 to €191,000 for a new appointee.
It is a substantial cut, however, in making the reduction the Minister said “in light of the ongoing severe economic conditions facing the country there is a need for leadership to be shown by those who hold high office across the public sector.”
For the past 18 months Coillte has not disclosed the salary of Gerry Birtchfield, the man doing the job of chief executive, because he has been working in an acting capacity while the Government decided whether a suggested merger of the forestry group and Bord na Mona should proceed.
There have been a number of calls for the salary to be disclosed but it has been kept secret.
While Coillte might be legally justified in arguing that because Mr Birtchfield is not a full time CEO and the salary cap does not apply to him, it gives little confidence that the organisation is keeping with the spirit of the salary cap.
Officials from the Department of Agriculture wrote to Coillte stating that his salary should not exceed €191,000. The company wrote back to say that because the role was temporary Mr Birtchfield was exempt and the board of the forestry organisation had agreed he should remain in position.
His current salary is from his position of Coillte Panel Products which does not publish accounts or disclose pay for senior executives.
Now that the state forestry body had decided to hire a permanent CEO it is possible Mr Birtchfield will apply for the position.
The salary caps were put in place when the Government was trying to reign in excessive pay at semi-state organisations during the bailout. There may be an argument for revisiting some of the caps in cases where there is hard evidence that they are considerably out of line with equivalent positions in the private sector.
However, the perception that Coillte found a way around a Government decision it did not like is an unhealthy situation.
No doubt the board will take account of the controversy and its impact on the reputation of Coillte when weighing up the merits of the candidates for the job of CEO.