Legal action with former General Secretary weighs on IFA finances – FarmIreland.ie
Accounts published by the Irish Farmers Association show the organisation’s finances continue to be in the red since a high profile pay scandal rocked the organisation in 2015.
The organisation’s finances further hit in 2018 following a €1.4m legal settlement with its former General Secretary Pat Smith.
The IFA Accounts to the year ended March 31, 2018, showed a slight increase in income for the year at €16.252m up €53,000 on 2017. However, the organisation’s income has declined substantially from over €20m prior to the scandal.
IFA staff costs totalled €5.385m for the year, with remuneration for the current Director General, Damian McDonald totalling €213,152.
Total IFA Executive Management compensation which comprises of three individuals was €563,826, while the average remuneration for the top 15 staff in the organisation, excluding Executive Management, was €131,539.
The 2018 accounts also show the IFA President, Joe Healy’s gross salary was €120,000 for the year, however, the net amount charged to the organisation was €68,000 after Director’s fees from outside bodies were excluded under IFA rules.
The net amount charged to the IFA for the remuneration of its Deputy President Richard Kennedy’s was €13,000 after Director’s fees from outside bodies were deducted from his gross salary of €35,000.
Notably, the accounts show a new pay agreement was reached with top 15 staff in the organisation, excluding Executive Management during 2017 and was implemented during this financial year. This involved pay reductions for these staff from an average of over €103,000 to €99,000. As part of the arrangement, the staff benefited from what the organisation called ‘once-off legacy adjustment’ of €7,186 on average.
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IFA National Treasurer Tim Cullinan said the year was challenging, but progress has been made in the three-year plan to eliminate the operating deficit which now stands at €1.5m.
“The expenditure for this year contains exceptional items totalling €1.4m which relate to the legal action with the former General Secretary, which was settled in February.
“Provisions for part of this settlement and ongoing legal fees had been included in previous years accounts. This matter is now concluded and the costs associated with it are fully through the system,” he said.
In February, the former General Secretary of the IFA Pat Smith settled his legal actions against IFA. The IFA confirmed at the time that Mr Smith would receive €1.55m concerning his severance claim and €350,000 in relation to his defamation claim.
Mr Smith resigned from his post as IFA General Secretary in November 2015, amid speculation around his salary and pressure for it to be disclosed.
Mr Smith said his agreement with IFA on his exit centred around a €1m exit package and a further €1m in yearly €100,000 instalments. Smith said the €2m exit package was agreed with the former IFA President Eddie Downey.
Downey later resigned from his position and the IFA Executive Council voted against the package Downey and Smith had agreed upon, with the Association saying at the time that it would explore all legal avenues to challenge any severance package for Smith.
Smith then brought two legal actions against the organisation, including one seeking orders requiring it to pay him €2m via payments of €1m now and a further €1m over the next 10 years. Smith said the November 19, 2015, agreement was valid, effective and enforceable.
In his second case, Mr Smith alleged that he was defamed by the IFA and has issued a claim for damages, including aggravated damages.
However, despite saying it would challenge Smith’s legal claims, the IFA today settled both claims with its former General Secretary.
At the time, it was revealed that Mr Smith had been paid in excess of €540,000 in 2013, including a base salary of €295,000, a pension contribution of €145,194, and a bonus of €55,000, as well as €35,000 from IFA telecom in report carried out by the Association’s former Chief Economist Con Lucey.
IFA’s 2018 accounts further show expenditure at the organisation decreased slightly when compared to 2017 at €17.527m.
IFA Membership for the year was at 71,712 with income from membership standing at €5.66m.
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