Hi °C | Lo °C Senior figures from the Department of Enterprise, Trade and Investment (DETI) were questioned by its scrutiny body over the £190,000 pay packet of Invest NI's chief executive, Alastair Hamilton.
Mr Hamilton, who was recruited on a basic pay of £160,000 with scope for additional performance-related pay of £48,000, waived his annual bonus of £36,800 for the three years since he started in the job. Now his basic salary has gone up to £190,000 but with no more performance-related element. The salary has been backdated to three years, meaning he could receive an additional £90,000 to make up for the shortfall.
He had been scheduled to discuss Invest NI's performance for the first six months of the year but ahead of that appearance, Invest NI chairman Mark Ennis and David Sterling, the top civil servant in DETI, were grilled about the changes to the pay packet.
The committee's chairman, SDLP MLA Patsy McGlone, and other members, said they did not wish to subject Mr Hamilton to questioning about his pay as the decision to give him the improved package was that of Invest NI. Here are extracts of the questions put to Mr Ennis and Mr Sterling by the committee members, and their answers.
MR McGLONE: Thank you for facilitating us on this issue, which has become a matter of some public focus in the last day or so. I've heard all sorts of spin and we're seeking to establish the hard facts of this and related matters.
MR STERLING: Your request for the hard facts is helpful and is important...As far as the hard facts are concerned, the chief executive applied for a post which was advertised on the basis of a salary of £160,000 a year with a performance related element of the total remuneration package equivalent to 30% of that. Obviously it became clear with the passage of time that performance-related pay was discredited as a concept and that obviously presented a difficulty for Invest NI because the chief executive had applied for a job, had been successful then had agreed to a contract based on that remuneration package. Given those difficulties Invest NI sought approval to renegotiate the package with the department and that was granted and a new package renegotiated with the chief executive. All normal due process was followed and those new remunerations have now been put in place. That, if you like, is the hard facts.
(Mr Sterling confirmed Mr Hamilton's salary was £190,000 - at the upper end of the band of £185,000 to £190,000 previously disclosed by Invest NI - but with no performance-related element)
MR ENNIS: This was an advertised position but it strikes me that although I wasn't in post at the time [the package] was obviously approved by Enterprise committee at the time of advertising. I'm not quite sure why we want to get into a pay dispute before the proverbial hits the fan in terms of commentary... There was £160,000 with £48,000 in the original package, but I will draw distinction between performance-related and the bonus paid to civil servants, which are from a pool of funds which are discretionarily awarded. This [package] was on a very detailed assessment of over 50 criteria assessed by the board of Invest NI and each and every one was scored by an individual member. That was fed back and that resulted in £37,000 being awarded for each of those years. The chief executive has been out of pocket for the last three years and has now subject to my negotiations with the chief executive, has now resulted in flat salary of £190,000 which means he has effectively lost over £20,000 for that period out of his own pocket. It was the chief executive in the first instance who was aware of the sensitivity of the word 'bonus' and the chief executive had come to my predecessor and suggested there was a lot... He finds the whole thing personally very embarrassing as I'm sure you will understand. He came to the previous chairman and suggested they may want to consider a flat-based package that might be more appropriate because of the political sensitivity over the word bonus.
MR McGLONE: What about rates of pay for Invest NI staff in general? Some suggested some were frozen.
MR ENNIS: Yes, that's correct.
MR McGLONE: Are there other benefits associated with the post [of chief executive]? Any car provided?
MR ENNIS: No, there's a pension...
MR McGLONE: Was the pension consolidated on bonus previously paid or retrospectively for the years in which he was being paid less?
MR ENNIS: The pensionable amount on the previous package... was based on £160,000 but under renegotiation it's based on £190,000. There is a slight reduction in cost to the taxpayer with going with the £190,000 package compared to the previous arrangement.
MR McGLONE: How would you answer the case that what you had here was a situation where a pay decrease, as you were presenting it, resulted in extra money and extra pensionable benefit. It's an unusual thing that this would be seen in that light. You're working on the presumption that there would be a continued performance at peak bonus?
MR ENNIS: No, it wasn't peak performance assessed. The total that could be awarded under performance-related pay was £48,000 but the amount recommended was £36,000. It wasn't peak but it was certainly a very good performance... I think it's a fair assumption that if the chief executive has performed the way he has over the last three years we would expect a good performance over the next following three years. Whether it would be £48,000 or not, perhaps not.
PHIL FLANAGAN: Who recommended the original package and did that have to be agreed with the department?
MR STERLING: The package that was advertised back in 2009 was prepared by the department, my predecessor and Invest NI - and that was actually approved by the minister at that time and by the Department of Finance and Personnel... The Invest NI board doesn't have discretion to set pay for its senior staff including the chief executive. That would require approval by DETI and in some cases would require the approval of the DFP. That would be the same for probably all non-departmental public bodies.
(He went on to explain the process in more detail, describing how a 'remuneration committee' reviews it and makes a recommendation to the department)
MR STERLING: If we were starting again, the board would need to come to the department with a remuneration package they believed was necessary to attract person of right calibre. We would do our due diligence, and look at the business case etc, we might consider that it was appropriate or look at it again. If appropriate and approved then within delegated authorities it may require DFP approval and in this case it did... But we're in a different position where someone is employed and has a legally binding contract. Obviously there you have to work with what you can do in employment law."
(Mr Ennis confirmed that the payment to Mr Hamilton had been made as the package had been approved)
MR ENNIS: The postholder has now been paid what was due based on the renegotiated package of £190.000. If the performance element had been paid it would have been additional over £20,000 above what he has been paid.
