IFA to challenge former chief’s €2m severance package

The executive council of the Irish Farmers’ Association (IFA) has voted unanimously against paying a severance package to its former general secretary Pat Smith.

The vote was taken during an all-day meeting of the national executive in Dublin which heard IFA president Eddie Downey had agreed a €2 million exit package with Mr Smith last week.

The deal, which involved €1 million up front, followed by €100,000 per year for 10 years, was agreed when Mr Smith resigned amid controversy over the size of his pay package.

The association was thrown into crisis this month by revelations Mr Smith received a total two-year pay package of nearly €1 million in 2013 and 2014. He resigned as general secretary in the face of outrage from many farmers at the scale of his pay, which the IFA had not previously made public.

Mr Downey last night announced his resignation as IFA president. He had earlier stood aside from the role pending a major review of corporate governance at the IFA, which is to be carried out by its former chief economist, Con Lucey.

Frustrated

Mr Lucey resigned last year as chairman of the IFA’s audit committee, claiming the committee was being frustrated in its work by Mr Smith.

In a statement, Mr Downey said he was stepping down in the best interests of the association. “I have always demanded the highest levels of governance and accountability within IFA and my clear understanding was that governance and management of IFA was a clear function and responsibility of the senior executive leadership with oversight from elected officers.”

He said it was well known he was determined to be a reforming president. He had worked to get an audit committee up and working.

He had met Mr Lucey and agreed with his proposed solutions to issues to be addressed by the committee, but unfortunately its work had been “frustrated.”

At an emergency meeting of the IFA’s executive council in Dublin yesterday, members were told Mr Smith’s severance agreement was signed by Mr Downey and Mr Smith, but not by IFA treasurer Jer Bergin, financial controller Ken Heade or deputy president Tim O’Leary. The latter three are understood to have opposed the deal.

Mr Smith had been general secretary for six years, but had worked for the IFA for 25 years in a variety of posts.

The IFA confirmed to The Irish Times it would mount a legal challenge to the severance package. Members at the meeting were also informed Mr Smith's pension pot was worth €2.7 million 12 months ago when he transferred it out of the IFA and into his own possession.

At the meeting, the second in a week, members vented their anger at the board of the IFA over the ongoing pay controversy. Four resolutions from county executives in Galway, Mayo, West Cork and Cavan calling for the entire seven-man board to resign were tabled.

Earlier, the association announced its review of corporate governance, including remuneration, would be carried out by Mr Lucey, who will report back to the council with his recommendations on December 15th. The 53-member council unanimously welcomed Mr Lucey’s involvement, noting it was an “important step forward in rebuilding the trust of farmers”.

Mr Lucey said his recommendations would “reflect the fact that times and corporate governance standards have changed; businesses and organisations are now subject to greater scrutiny as regards how they operate”.

Review

Mr O’Leary, who will undertake the functions of the IFA president during the review, confirmed Mr Lucey had agreed to examine all aspects of the remuneration package of the former general secretary from his appointment in 2009 until his resignation last week. “He will do the same for the president and the deputy president, in order to provide the membership with full transparency,” Mr O’Leary said, adding that the IFA would make all financial data available to Mr Lucey.