THE 76 member board of Golden Vale co op has postponed a decision on the future of chief executive Mr Jim O'Mahony and told Golden Vale plc and the public company's former chief executive to agree a settlement package.
The co op board met in Charleville, Co Cork, yesterday to consider Mr O'Mahony's future following last week's shock decision by the plc to dismiss the chief executive after he refused to resign. The vote was carried by just eight votes to seven after being proposed by Dublin solicitor and plc director Mr James Osborne and left the board deeply divided.
But yesterday's meeting of the co op board was not presented with any proposal to endorse the plc's removal of Mr O'Mahony as chief executive of the co op - apparently in the expectation that any such proposal would have been voted down heavily.
It is understood that there has been a groundswell of local support for Mr O'Mahony since his dismissal by the plc last week and any move to remove him as co-op chief executive would have been voted down heavily.
The co-op board meeting will reconvene next Friday, and sources have indicated the co-op expects the plc and Mr O'Mahony to have agreed a compensation package. Otherwise the plc could face the unpalatable prospect of having the co-op, which controls the plc's Irish milk supplies, retaining a chief executive that the plc has previously voted to remove.
Earlier this month the co-op board rejected by 42 votes to 18 a motion of no confidence in Mr O'Mahony tabled by the former co-op and plc chairman, Mr Denis Wallis. Any motion to remove Mr O'Mahony at yesterday's coop board meeting would probably have been voted down more emphatically, local sources said.
There are now expected to be intensive negotiations between the plc's and Mr O'Mahony's legal advisers on the size of the compensation package. Mr O'Mahony's package last year is thought to have been in excess of £300,000 between salary, bonuses and pension contributions. His settlement will probably have to be a multiple of this package and is likely to be at least £500,000 and possibly close to £1 million.
It is understood that yesterday's co-op board meeting - at which Mr O'Mahony was not present - was heated and involved heavy criticism of some plc directors who are being blamed for orchestrating Mr O'Mahony's removal.
This followed closely on the announcement two weeks ago that Golden Vale's milk suppliers faced a £3.1 million milk superlevy fine in addition to a £4 million superlevy penalty in respect of 1995-96.
A settlement of the dispute between the plc and Mr O'Mahony is urgent as the current impasse means, in effect, that crucial decisions on the milk price to be paid to farmers have still to be taken. It is also crucial that the apparent conflict between the interests of milk suppliers and institutional investors is reconciled.
