Last week’s session of the Public Accounts Committee (PAC) of the Dail (Parliament) at which the head of Rehab Ireland Angela Kerins was appearing was of special interest to this column. Kerins was there to explain how her organization spends all the public money it gets - over €80 million last year. And of course what most people wanted to hear was how she would justify her astronomical pay.
Before they got down to the nitty gritty, however, Sinn Fein’s Mary Lou McDonald, in a voice dripping with disdain, asked Kerins why her lawyers had sent an advance message to the PAC requesting that it stick to its brief of inquiring about public money and not drift into wider areas.
She got a vague sort of reply from Kerins which you can hear yourself if you click on the first video link in the following extract from the proceedings carried by www.thejournal.ie —
http://www.thejournal.ie/mary-lou-mcdonald-angela-kerins-rehab-salary-1336058-Feb2014/,
In fact you will find it instructive to click on all the video links you see in the extract, given what they reveal about Kerins’ general attitude to questions.
But the first one is particularly interesting to us because in it McDonald goes on to ask Kerins about an earlier legal missive her representatives sent a few weeks back to the Irish Voice’s sister website IrishCentral’s host server threatening legal action. This, you may remember, was over my column in the first week in February which had speculated about how much Kerins’ “financial package” might be (at the time she was refusing to disclose her salary).
That legal threat was interesting partly because it was directed at the host server rather than the publisher and resulted in the column being removed from the site without the editor being informed.
But the immediate issue for the PAC was why. Kerins’ legal team wanted to silence the IrishCentral piece about her pay. We were mystified when we heard this a few weeks ago because there was nothing in that column that had not already been published in various parts of the media here.
In addition to that, the column had gone to considerable length to explain that the big salaries and pensions in some parts of the charity sector here were related to the salaries of top executives across the state and semi-state sector.
We pointed out that during the boom this elite came to regard a salary in the €100,000 range as chickenfeed and that the norm became €200,000 or more.
And unlike in the private sector, where pay and particularly pensions had been decimated, the elite in the semi-state and state sectors and in charities like the Central Remedial Clinic and Rehab Ireland had continued on with financial packages that were still close to boom time levels. So the financial package that Kerins was enjoying was part of a much wider problem here, we pointed out.
If anything, we felt, Kerins should have been grateful to us for putting the salary issue into context. Instead of that, she attacked us with a legal threat!
Although she was prepared to tough it out at home, perhaps she felt uncomfortable with the issue being raised on IrishCentral because of its international reach.
Looking back at that removed column now, published in the first week in February before Kerins had disclosed her salary, some clarification is necessary. The column said:
“A few years ago her salary was put at over €230,000 a year and it’s unlikely to have changed very much. Also unlikely to have changed much is the staggering levels of extras she was getting, in expenses, allowances, pension contributions, health benefits, a top of the range Audi car and so on. A conservative estimate of her total package a couple of years ago put it at well over €400,000.”
Following the disclosure two weeks ago, we now know that her salary is €240,000, an increase of €6,000 from the last time her salary was disclosed in 2011, when it was €234,000. Why it should have gone up at a time when everybody else’s salary was going down, at the lower levels in Rehab and elsewhere, is not clear despite the PAC’s efforts to find out.
Kerins also told the PAC that her pension is part of a defined contribution scheme, but it is unclear how much of a pension pot she has built up and how much of this has come from Rehab. This is “private.”
She said that Rehab does not pay her health benefits or any allowances but that she does get expenses, all of which are vouched. Exactly how much she has been getting in expenses in recent years and for what was not revealed.
The PAC was told that she does have a top of the range car from Rehab, but pays the normal benefit-in-kind taxation on this. This was presented as some kind of mitigation! In fact it’s what is required by law, and having such a car is still regarded by most people as a significant plus.
Overall, the total amount of Kerins’ financial package is now estimated to be worth well over €300,000 a year, although without more detail it is not possible to be definitive about it.
The main thrust of Kerins’ argument is that she is a private citizen working for a group of companies called the Rehab Group that is 60 percent in the commercial sector, with 40 percent of its funding coming from state grants and charitable sources. On that basis, she argues, her financial arrangements are private and she also insists that all her salary comes from the commercial side and therefore she should not be questioned about it by state representatives like the PAC members.
This is arguable, but it’s far from convincing. If the €83 million in state funding going into Rehab — and all of the charitable donations from the public — was not there it is most unlikely that Rehab could pay Kerins such a huge salary.
And it’s a wider argument than that. The Rehab group in general is regarded by most people as a charitable not-for-profit organization, and that is of huge benefit to its “commercial” operations which employ people with various kinds of disabilities. It’s why, for example, people buy Rehab products, put glass in Rehab bottle banks and buy Rehab lottery tickets.
Without that goodwill from the public and other businesses it is unlikely that all of its commercial activities would survive in the real business world. The distinction that Kerins makes between Rehab’s commercial operations and state/charitable funding is not as clear cut as presented.
Another pious assertion at the PAC hearing is also worth exploring. This was that the salary enjoyed by Kerins is decided by the board on the advice of international “independent remuneration experts” and is “at least 20 percent below the current market median” for an organization of Rehab’s size.
Leaving aside the fact that pay consultants like this are responsible for the grossly inflated salaries at the top of many organizations, this gives the impression that Rehab is an international business with the complexity and pressures of, say, Apple or Pfizer. It’s not — it’s a home-grown charity with a relatively simple business structure.
It also implies that Rehab had to scour the globe looking for someone like Kerins. They didn’t. She’s a former nurse, promoted from within the organization. Nothing wrong with that, but she’s no Sheryl Sandberg.
There was one other interesting moment at the PAC hearing when McDonald asked Kerins about her use of helicopters. This may have been prompted by rumors that have been circulating about the extensive use on expenses by Kerins of hotels, limos and even helicopters.
Her rather coy answer was that she had occasionally been given lifts in helicopters but they had not cost her or Rehab anything. A former developer and businessman, however, told the Sunday Times last weekend that he spent over €100,000 bringing Kerins around Ireland in his helicopter, bringing her to London twice in his private plane where she went by limo to stay in the Dorchester and Claridge’s.
Not only did she stay in the best hotels, the developer John Kelly also says he brought her to Michelin starred restaurants.
All this was an attempt by him to get Rehab to allow him to buy the highly valuable Rehab HQ site on the south side of Dublin. He was offering to relocate them as part of a potential deal.
Kerins has said she is “shocked’ by this claim and says she never discussed business with Kelly on these “social” trips.
That may be so and Kelly’s claims should be treated with caution, but it does give a window into the level Kerins liked to operate at.
It’s all a long way from most people’s perception of how a charity boss should function. The very idea that a charity boss — even one with extra commercial arms — should be on a salary like Kerins earns is for most people a total contradiction.
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