The board of the Irish Stock Exchange has run out of credible reasons for not adopting new guidelines on the disclosure of directors' remuneration. Its latest contention, following last week's meeting with the Tanaiste, Ms Harney, that such disclosure would deter companies from seeking share listings on the exchange is sheer poppycock.
Such information has not inhibited new companies from going public in Britain. Neither has it stopped Irish companies from disclosing much more intimate information on directors' pay than revealed by most Irish publicly quoted companies. Indeed, if the exchange's contention had been true, the recent listed companies would not have floated.
There are many examples - here are some. Sherry FitzGerald revealed the basic salaries of its executive directors, when it went public. Executive chairman Mr Mark FitzGerald was listed with a basic salary of £100,000 (€127,065); others were Mr James Barrett £71,000, Mr Killian O'Higgins £75,000, Mr James Meagher £72,000 and Ms Clair Cullinan £75,000. They are also entitled to bonuses and it will be interesting to see what disclosures the company makes with its first annual report as a listed company.
Another company, Irish Permanent, in its listing particulars, gave the annual salaries of three directors, though these were service contracts. Mr Roy Douglas, for example had an annual salary in 1996 of £201,000, Mr Peter Fitzpatrick had £140,000 and Mr Peter Ledbetter had £140,000. Later, it gave the remuneration of the highest-paid director (basic salary £228,785, fees £22,180, benefits £19,958, annual bonus £68,224), who was not named, but it was obviously Mr Douglas. It also gave the remuneration of the chairman (Mr John Bourke £91,168), but lumped all the others together.
In an enlightened move, however, Irish Life - which later merged with Irish Permanent - left no room for ambiguity by listing who got what. Mr David Went received £250,000 salary and £128,000 as a bonus. And Mr David Kingston, his predecessor, and ironically the exchange's chairman, had his remuneration disclosed. This amounted to £59,000 for the part period and a note said he received £225,000 in the period after his retirement from the board. And showing a leadership role, Irish Life & Permanent intends to give a full disclosure in its 1999 annual report. Another company which is not hiding the remuneration of its directors is print and packaging firm Adare Printing Group. Here again, like Irish Life, it gives a precise breakdown, and it has done this voluntarily.
Obviously, the Irish Stock Exchange's excuse of inhibiting share listings is a red herring. Surely a more important consideration would have been the huge valuations placed on the shares held by founding shareholders (that is where the real money is made) but then that kind of information could not have been suppressed! Thankfully, the exchange board seems to have abandoned the security argument, as that did not stand up to any form of scrutiny.
The Institute of Directors in Ireland has taken, and maintained, a hard line and is vigorously opposed to greater transparency on its members' pay. Yet its affiliated members, in Northern Ireland and Britain, happily sit on boards which give individual breakdowns of their executives' remuneration.
Rather than having Ms Harney legislate for the changes on the disclosure of directors' pay, as recommended by the Irish Association of Investment Managers, the board should stop dragging its heels, ignore the blinkered views of directors who are opposed, and enshrine the proposed changes in its own listing rules. It has already displayed its reluctance to adopt what is best practice in Britain and the US. Also it is now nine months since it said it would examine the guidelines.
Clearly, the board is not moving in line with the demands, and the transparency requirements, of a modern society. If it was, it would have initiated the changes on directors' pay a long time ago.
Bill Murdoch can be contacted at bmurdoch@Irish-Times.ie
