Nama board said it was ‘disappointing’ it couldn’t pay staff bonuses

The board of Nama said it was “disappointing” they wouldn’t be allowed to pay staff bonuses after the Minister for Finance warned against it.

The agency halted performance-related pay for last year after being told by Paschal Donohoe that running a compulsory redundancy programme at the same time as paying bonuses would not be a “good mix”.

Internal records detail how the board believed this was “disappointing, particularly” at a time when they were struggling to keep key staff.

They believed the block on payments was a “major risk” to the organisation but that they could not afford to lose the support of the Minister, according to private session board minutes that were released under Freedom of Information.

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Nama’s annual report disclosed that payment of bonuses had ceased for 2020, after totalling €1.5 million over the previous two years. No further information was provided on the reasoning behind it, with the pandemic originally believed to have been the rationale.

However, it has now emerged the decision was made following direct discussions with the Minister for Finance.

An extract from minutes of their remuneration committee meeting in March explained how Mr Donohoe had met Nama chairman Aidan Williams on March 4th.

“The Minister strongly indicated that potentially running a compulsory redundancy programme with performance-related pay was not a good mix in this current economic environment so therefore there is no PRP [performance-related pay] proposed for 2020,” it said.

The committee was told it should be noted that all Nama’s objectives for 2020 had either been met or exceeded.

The minutes also detailed how the agency’s chief executive, Brendan McDonagh, was eligible for performance-related pay but had “declined the opportunity” to be considered for the scheme last year.

“The committee however noted that the performance sof the CEO was such that a PRP [performance-related payment] would have been warranted based on his own and Nama’s 2020 performance,” said the minutes.

Extracts from the minutes of a private session of the Nama board three days later said the decision was “disappointing, particularly” considering the agency faced challenges in retaining key staff and after a year in which it paid €2 billion to the exchequer.

The minutes said: “The board noted that, although it is important to not lose the support of the Minister . . . losing key resources is a major risk to the organisation and that it is a topic that should be revisited.”

Redundancy

Nama had paid €500,000 in performance-related pay in 2019 and €1 million in 2018.

The agency has also paid out large sums under its voluntary redundancy scheme, with €2 million spent last year – comprising €1 million in statutory and redundancy payments, €400,000 on its “retention scheme” and €600,000 for “gardening leave”.

Asked about the records, a spokesman for Nama said: “[Our] remuneration committee agreed with the Minister’s position regarding the difficulty in the prevailing economic environment of applying performance-related pay alongside Nama’s redundancy programme, which could have involved compulsory redundancy.

“The board accepted the committee’s recommendation on this basis, saying it was understandable in the circumstances but disappointing given the achievement of 2020 objectives and the challenge in retaining specialist staff.”