‘Disturbing’ sums paid by IFA

CONFIDENCE in the country’s leading lobby group and largest farming organisation received another hammer blow this week when it was revealed that outgoing Irish Farmers’ Association’s presidents received a year’s salary as “a golden handshake”.

“There is massive disappointment regarding the presidents’ golden handshake. Farmers are really disappointed, more than anything else. We knew the general secretary was on big money but it turns out that it was bigger than we knew,” said Ardrahan farmer and Galway IFA chairman Pat Murphy.

While revelations about the pay of former general secretary Pat Smith rocked the IFA in recent weeks, the full scale of his pay and pension contributions since 2009 were revealed at a marathon meeting of the IFA national executive on Tuesday.

The new information was contained in the report and recommendations on the association’s structures and procedures and certain remuneration issues presented by former IFA chief economist and Clare-man Con Lucey. It shows that Mr Smith received more, each year, than the combined salaries of Vladamir Putin and Angela Merkel.

The report revealed that in pay and ongoing pension contributions, the IFA paid Mr Smith almost €3,446,000 over the six years between 2009 and 2015. It also showed his remuneration fluctuating between €452,484 in 2014 and 2015 to a peak of €542,634 in 2013, the year of the fodder crisis. His income from the IFA jumped by €40,000 between 2009 and 2010, coinciding with a change of IFA president and treasurer, from Pádraig Walshe and Ruaidhri Deasy to John Bryan and JJ Kavanagh respectively.

According to Clare IFA chairman Andrew Dundas, “the amount of money paid out is disturbing”.

The report also revealed the remuneration of the IFA president and deputy president over the same period.

Pádraig Walshe received a salary of €175,000 in 2009 and a “car equivalent” of €6,250. The following year, John Bryan received a salary of €105,000, farm relief of €27,480, IFA Telecom fees of €15,000 and the car equivalent of €5,200.

His salary increased from €105,000 to €107,500 for the second and subsequent years of his presidency. The car equivalent did not vary over his four years in office and the IFA Telecom Fees increased to €20,000 for 2012 and 2013. This meant he was paid in total €152,680 in 2010, €148,380 in 2011, €160,420 in 2012 and €169,400 in 2013.

Ex-IFA president Eddie Downey was paid €147,500 in salary and €8,500 in 2014 and 2015.
The presidents were each invited to the board of FBD Holdings during their tenure. The current directors’ fees level is €39,600.

What took many of the county representatives by surprise, however, was the revelation that “each president was the recipient of a termination payment equivalent to one year’s remuneration on leaving office”.

“I think that was the really disturbing aspect of Tuesday’s meeting,” Mr Dundas stated.
“I would imagine very few at the meeting knew about that until it was announced, the aspect of the ‘golden handshake’, as some call it, at the end of the term,” he continued.

“The general secretary would have been responsible for the remuneration of the president and then the president and treasurer would have set the salary of the general secretary,” he explained.

As well as holding the position of president for the past two years up to his recent resignation, Mr Downey was also deputy president from 2010 to 2013. The salary for that role was €30,000 for those four years. This was increased to €35,000 for Tim O’Leary in 2014 and 2015. In 2009, the deputy president salary for Derek Deane was €50,000.

In his report, Mr Lucey assessed the remuneration of the president and deputy president.
“The main problem is that the level of salary has become disconnected from the original purpose of the payment, which was to ensure that the farm did not suffer during the term of office of the president and deputy president. A factor that must be taken into account in setting such payments is that they are subject to taxation,” he stated.

“The second problem is that there is no clear ruling on payment from directorships of outside bodies,” he added.

Having identified these concerns, the Ballynacally man’s report recommended that “in the future, the remuneration committee will make recommendations to the executive council on such payments”.

He suggested that the payment to the president “should be based on the gross cost (before taxation) of replacing the labour and management of the president on a seven-day-a-week basis” and that “the total payment, and payments to the president from outside bodies, should be paid into IFA funds, other than any expenses arising from the involvement in the outside body. Alternatively, if this is not practical, the fees should go to the individual but the payment from IFA should be reduced by the same amount.”

Mr Lucey also made a number of recommendations in relation to governance and transparency in the IFA. His report suggested that the executive council should “review the decision to integrate the two former positions of county chairman and county representative on the executive council” and that the position of general secretary should be renamed the chief executive and a new post of secretary should be created and “have a high degree of independence from the chief executive in defined areas dealing with governance and transparency and would also take over some of the responsibilities of the current post of assistant general secretary”.

At Tuesday’s 12-hour meeting, a motion of no confidence in the executive board of the IFA was defeated, while a second motion of no confidence in deputy president Tim O’Leary and the IFA national treasurer Jer Bergin was also defeated.

Mr Bergin was unanimously elected national chairman of IFA to lead the association until the election of a new president is completed. Mr O’Leary had decided that he would not continue to carry out the functions of president because he is a declared candidate in that election. The executive council will meet on Tuesday, January 5 to decide a date for the election.

According to Mr Murphy, the IFA is now at a stage where it can put some of this scandal behind it and look ahead.

“It is out in the open now. Con Lucey has put together a road map for the association to follow and, hopefully, we will use it and learn from all this and not let these mistakes happen again. Members on the ground have to be listened to and the IFA hasn’t been listening up to now,” he concluded.

A statement from IFA said it “is committed to acting on the review carried out by Con Lucey.

By Nicola Corless

Click here to download the full IFA Con Lucey review.