Ms Mary O'Rourke, leader of the Seanad and the former minister for public enterprise who was responsible for Eircom's flotation said yesterday the €3.8 million payoff to Mr Alfie Kane was "entirely inappropriate".
Ms O'Rourke, who had an acrimonious relationship with the former Eircom chief executive after he criticised the Eircom flotation price set by the Government, also proposed introducing legislation to cap executive payoffs.
In an interview on Today with Pat Kenny, Ms O'Rourke defended her role in Eircom's flotation, saying she had no regrets about the flotation price set by the Taoiseach, the Tánaiste, the Minister for Finance and herself. They had worked for the good of the State and the money raised went into public services, said Ms O'Rourke.
Responding to claims that Eircom shareholders were short-changed, Ms O'Rourke said shareholders who had sold their shares up to 15 months after the company was floated would have made gains of 10-15 per cent.
Ms O'Rourke was speaking after the publication of details of a €3.8 million payoff which Mr Alfie Kane, the former chief executive of Eircom, received when he left the firm in November 2001. The payoff, which consisted of a €1 million payment for loss of office and €2.8 million in pension contributions, was paid following a slump in the value of Eircom shares, and the subsequent break up of the telecoms company.
The remuneration committee of the former Eircom board, which consisted of Mr Ray MacSharry, Mr Jim Flavin, Mr Dick Spring and Mr Martin Pieters, sanctioned Mr Kane's golden handshake.
Ms O'Rourke, who voted against the €1 million payoff to Mr Kane at Eircom's annual general meeting, said it was far too much and was not appropriate in the circumstances. She said "there was no doubt that Mr Kane was a canny man" but insisted that her remarks on the issue of the payoff were not made out of a "sense of vengeance."
The relationship between Ms O'Rourke and Mr Alfie Kane deteriorated following a steep drop in Eircom's share price, and a disclosure by Mr Kane that he thought the €3.90 flotation price was set too high.
Ms O'Rourke also proposed that the Government should introduce legislation, similar to that currently under review in the UK, which would put a limit on the remuneration executives could receive when they left firms. This remuneration should be based on performance, she added.
