Previously NAMA CEO, Brendan McDonagh’s salary has been reported to be €500,000 per annum. Yesterday, Ireland’s Sunday Business Post, without citing sources, claimed that his actual salary was €430,000 per annum and a bonus of up to 60% on top. The newspaper claims details of the salary will be published in the National Treasury Management Agency annual report later this year. Should the NAMA CEO be awarded a full 60% bonus, that would bring his salary to €688,000. Not bad for a 42-year old accountant with a quasi-civil service career history at the ESB and NTMA. On the other hand NAMA will have €90bn of loans (at par value) under management in the next couple of months and the last time I looked, the heads of comparable property funds held salaries in the €millions.
It would be very interesting to see the performance metrics used to determine the NAMA CEO’s 60%-max bonus. Profitability of the agency? Mightn’t that encourage hoarding of assets and the sale of low-lying fruit? Recovery of loans but by reference to what NAMA paid or the loan’s par value?
Whilst NAMA claims not to set individual developers salaries, there appear to be credible claims that in practice maximum developer salaries are implicitly being set in the €192-200,000 range. NAMA has asserted that it has cut developer “overheads” by 50% but it is for the developer to decide how to deliver a project within the overall allocation. Some developers have produced business plans which included more substantial salaries – €1.5m in one case, which according to NAMA chairman, Frank Daly “didn’t get past first base”. Of course sooner or later the salaries and rewards of NAMA developers will get into the public domain, perhaps through company reporting and we will then see the rewards on offer.
Developers waiting for sympathy from the public for their reduced circumstances will be waiting some time, such is the general outrage at the consequences of the financial crisis and the role of developers (as borrowers whose debts are now in trouble and necessitating bailouts for the banks from the pockets of the nation). €170,000-a-year part-timer, Frank Daly at NAMA has suggested that it might be patriotic for developers to work for nothing and others have suggested the minimum wage. That’s all very well but what moral high ground does NAMA occupy when it is paying its CEO a guaranteed €430,000 per annum and a bonus of up to 60% on top?
Of course NAMA didn’t cause the financial crisis and is tasked with addressing an element of the crisis. So that differentiates NAMA from its borrowers. On the other hand, some developers with non-recourse loans or ring-fenced corporate limited liability have the option of telling NAMA to get lost whilst they move onto other projects that might keep them in the lifestyle to which they were at one time accustomed. That’s the uneasy truth.
And because it’s very popular, I leave you with the latest version of the public sector salary league showing those whose salaries are more than the Taoiseach’s. The list isn’t exhaustive and I expect that several officers of quangos and indeed others like the Attorney General should be on here but alas their salaries appear not to be in the public domain.
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NAMA Wine Lake 