Joe Gallagher From: Emma Reeves Sent: 25 April 2017 12:12 To: Michael Goodwin; Joe Gallagher Cc: Shirley Groarke Subject: Ervia Group CE: Views Michael, Appointment of new Group Chief Executive You may recall that Ministerial consent was provided to Ervia on 18 January last to the terms and conditions of appointment of the Group CE and these included the following terms: Term 7 years Notice Period Not less than 3 months, not more than 6 months Basic salary per ?220,000 annum Car The use of a car provided by the company on terms determined by the company from time to time. Pension Choice of: contributory de?ned benefit scheme; defined contribution pension scheme; or company pension scheme (if already a member) i.e. as set out in the standard template contract Health Insurance The Employee shall be entitled, if he/she so wishes, to participate in private health insurance through the Company?s group membership, and if he/she so participates the Company shall deduct the amount of the relevant premium from the Basic Salary. Holidays No more than 30 days Following the recruitment process, a change to those terms is necessary as articulated by in its report attached. The salary will be ?225,000 and it is intended to provide for health insurance for the Group CE, his spouse and his dependent children through the Company?s group membership at the Company?s expense, and that the contract of employment should ensure flexibility as regards the nature of the role should there be any restructuring of the Ervia group within the term of the CEO. The agreement of PER to the draft contract has been sought and is being progressed. Your Minister?s views on the revised remuneration package (revised salary, health insurance, and flexibility clause) for the appointment of a new Group CE, is hereby sought under Section 16(3) of the Gas Act 1976. Appointments to the Boards to note The Group CE of Ervia will ex-officio be appointed to the Boards of Ervia, Irish Water and Gas Networks Ireland. The approval of Government is required to the appointment of the new Group CE to the Board of Ervia, and a memo will be brought in due course, which will also note the appointments to the Boards of IW and GM. No fees are payable for the appointment of the Ervia Group CE to the Board of Ervia in line with the One Person, One Salary principle. An early response would be appreciated, Regards Emma Emma Reeves Water Services Governance Department of Housing, Planning, Community Local Government Emma.Reeves@housingeovie 053 911 7417 A Rebuilding Ireland Providing a world-class service to the Side and to the people of Ireland. 9am!? Is faoi run agus chun usaide an t? n6 an aonzin ata luaite leis, a sheoltar an riomhphost seo agus aon comhad atzi nasctha leis. Mai bhfuair tt?l an riomhphost seo tri earrziid1r d?an teagmhziil le bhainisteoir an chorais. Deimhnitear leis an bhfo-n?ta seo freisin go bhfuil an teachtaireacht riomhphoist seo scuabtha le bogearrai frithviorais chun viorais rt?omhaire a aimsiti. This email and any ?les transmitted with it are con?dential and intended solely for the use of the individual or entity to whom they are addressed. If you have received this email in error please notify the system manager. This footnote also con?rms that this email message has been swept by anti-virus software for the presence of computer viruses. 1. Mr Michael Goodwin 2. Rúnai Aire Recruitment of a Chief Executive Officer for Ervia – Revised Terms and Conditions Decision Sought The Minister for Housing, Planning, Community and Local Government has sought the views of the Minister, under Section 16(3) of the Gas Act 1976, on the terms and conditions for the appointment of a Chief Executive Officer to Ervia. The appointment of the CEO is a matter for the Board. This request is attached at TAB A. Background on CEO appointment The current CEO of Ervia, Mr Michael McNicholas, was appointed to the role in April 2013 with the approval (at that time as the majority shareholding Minister) of the Minister for Communications, Energy and Natural Resources. Since November 2015, the majority shareholding Minister is the Minister for Housing, Planning, Community and Local Government. The role of CEO will become vacant with effect from May 2017 and Ervia wish to proceed to recruiting the preferred candidate as soon as possible. The draft terms and conditions, including salary, car and pension, are not the same as those of the current CEO. There were difficulties in attracting the calibre of candidate sought with the existing salary of €220,000 per annum and Ervia had initially sought an increase in the package to €250,000 plus VHI family insurance. Following further negotiation, it appears that €225,000 plus VHI family insurance will be acceptable to the candidate The Minister for Housing, Planning, Community and Local Government has sought the approval of the Minister for Public Expenditure and Reform before providing his consent. NewERA view NewERA examined the proposal and noted the following in relation to the overall recruitment process: • A total of 187 candidates were identified. However, many withdrew due to the complex nature of the job and the significant gap in salary expectation. Eventually six candidates were short listed with three progressing to the final interview. One of these withdrew due to the salary package on offer. • The Ervia Chairman has indicated that, following detailed psychometric testing, a standout candidate was chosen by the interview panel. • Eriva have now discussed terms with this candidate, including a salary package of €225,000 plus VHI family insurance. NewERA concluded that under the relevant legislation, appointment of the CEO is a matter for the Board and accordingly NewERA (and the relevant Government Departments) have not been involved in the recruitment process. Having considered the strong advice of the Board that they have one recommended candidate only, NewERA has recommended that reliance is placed on the Board’s assessment of the required remuneration terms and that the requested approvals are given. The NewERA report is attached at TAB B. Appointment to the Board of Ervia The CEO of Ervia will be appointed to the Board of Ervia as an ex-officio member. The approval of Government will be required for this appointment to the Board, and a Memo to Government will be brought by the Minister for Housing, Planning, Community and Local Government in due course. No fees are payable for the appointment of the CEO to the Board in line with the “One Person, One Salary” principle. Recommendation Given the detailed process carried out by Ervia in seeking to fill this position, and the analysis carried out by NewERA on the increased salary terms and conditions and their view that they are acceptable, it is proposed to revert to the Department of Housing, Planning, Community and Local Government as follows: The Minister for Communications, Climate Action and Environment notes the proposed revised terms and conditions for the appointment of a new Chief Executive Officer to Ervia and the timeline for concluding the recruitment process, and in the circumstances, agrees with the proposed terms and conditions. Joe Gallagher Energy Security Division 2 May 2017 Pa elof2 H- eSubmission Cover Sheet Current Status: 14 - Approved by Minister Details Title: Recruitment of CEO for Ervia File Ref: ERV1 Division: Energy Security Division Participants: Michael Goodwin; Roisin Garland; Mary O'Donnell; Caoimhin Smith; Eilish Ruddle; Joe Gallagher Classi?cation: Section requesting approval Final Approval by: Minister Commercially . . Yes Press Release: No Urgent Date: 05/05/2017 00:00:00 Reason for urgency: To allow for the necessary to be undertaken. Submission Documents 170504 Recruitment of CEO for Ervia Minister 04/05/2017 Seana Signature 13:02 McGearty Submission on new Contract for CEO Attachment 02/05/2017 Michael Ervia 17:16 Goodwin TAB A request for Ministerial views on Attachment 02/05/2017 Joe new CEO Contract. Ervia 14:02 Gallagher TAB report on Ervia CEO Attachment 02/05/2017 Joe recruitment and salary 14:02 Gallagher Printing instructions: Please print all documents Comments 02/05/2017 Please see attached submission regarding the revised terms and Joe conditions for the appointment of a CEO for Ervia following a recruitment Gallagher: process carried out by Ervia. The report outlines the revised salary and notes other relevant issues of interest. 02/05/2017 Michael Minister, please see the attached submission on the terms and conditions Goodwin: for the appointment of a new CEO to Ervia, which includes a salary of ?225,000 and a family health insurance package. Following a long process, the terms and conditions provided have been agreed by Ervia subiect to Ministerial approval. has recommended acceptance aboutblank 23/06/2017 Page 2 of 2 of these terms and conditions and it is understood the Minister for Housing will approve them once your views are received and the consent of the Minsiter for PER is received. In the ciscumstances, it is recommended that the terms and conditions are supported. History 02/05/2017 Energy Security Division: \Mth Division 02/05/2017 Energy Security Division: Head of Function 02/05/2017 Energy Security Division: Approved and sent to Minister 03/05/2017 Minister's Of?ce: Received by Minister 04/05/2017 Minister's Of?ce: Approved by Minister aboutzblank 23/06/2017 Page 1 of 1 eSubmission Cover Sheet Title:Recruitment of CEO for Ervia Summary/Recommendation The Ministers view are being sought on revised terms and conditions for the appointment of a CEO for Ervia Comments 02/05/2017 Please see attached submission regarding the revised terms and conditions Joe for the appointment of a CEO for Ervia following a recruitment process Gallagher: carried out by Ervia. The report outlines the revised salary and notes other relevant issues of interest. 02/05/2017 Minister, please see the attached submission on the terms and conditions Michael for the appointment of a new CEO to Ervia, which includes a salary of Goodwin: ?225,000 and a family health insurance package. Following a long process, the terms and conditions provided have been agreed by Ervia subject to Ministerial approval. has recommended acceptance of these terms and conditions and it is understood the Minister for Housing will approve them once your views are received and the consent of the Minsiter for PER is received. In the ciscumstances. it is recommended that the terms and conditions are supported. MiniSterismgm?/l ?4 2 ix 7 Date about:blank 03/05/2017 Print Submission Page 1 of 4 00453?17: Approval of the Terms and Conditions for the appointment of the new CEO of Ervia To: Minister Author: Christopher Ryan Status: Completed Owner: Christopher Ryan Purpose: Approval Reviewers: Peter Brazel,Colin Menton Division/Of?ce: Remuneration and Industrial Relations Decision By: Final Comment I agree - Paschal Action Required Approval of terms and conditions for the appointment of new CEO of Ervia Executive Summary In Jan 2017, the Minister for Public Expenditure and Reform consented to the following terms and conditions for the appointment of a new CEO to Ervia: Term 7 years 3? Notice Not less than 3 months, not more than 6 months Basic salary ?220,000 Car . The use of a car provided by the company on terms determined by the company from time to time. Pension Choice of: contributory de?ned bene?t scheme; de?ned contribution pension scheme; or company pension scheme (if already a member) as set out in the standard 3 template contract 12/07/2017 Print Submission Page 2 of 4 5 Health Insurance The Employee shall be entitled, if he/she so i wishes, to participate in private health insurance through the Company's group membership, and if he/she so participates the Company shall deduct the amount of the relevant premium from the Basic Salary. Ho'idays No more than 30 days Following the recruitment process, a change to those terms is deemed necessary to conclude contractual negotiations. The revised pacakage includes a salary of ?225,000 and health insurance for the CEO, his spouse and his dependent children through the Company's group membership at the Company's expense and that the contract of employment should ensure ?exibility as regards the nature of the role should there be any restructuring of the Ervia group within the term of the CEO. endorses the proposed changes and we recommend your agreement to the appointment of the CEO on the terms and conditions speci?ed. Comments - (10/05/2017 13:17:00) Peter Brazel: Minister, In the circumstances, the proposed terms and conditions for appointment are recommended. Detailed Information Appointment of the Chief Executive of Ervia under Section 16 of the Gas Act 1976 (as amended by Section. 37 efthe (Eras Regu?atien Act 20.1.3) requ?ries the and consent of the Minister for Housing, Planning, Community and 1-..ecal G?e?x-r?ernment given with the appreval of the Minister for Finance and the eonsent of the Minister for lhiblie Expenciitere and Referm having consulted with these. Ministers and the Minister for Comeme.ieaitions, Climate Action and Environrnegnt in relation tn the terms and. cenditiens fer the appeintment ef a new Chief Executive Of?cer to Ervia. 12/07/2017 - - itch. mien-area tau-white Print Submission . Page 3 of 4 "fire current Chief was appointertl for a '7 year term on the '7th of May 20% but has decided not to complete the full doratitm ot? the contract. and there is need for the rec-roi'trrtent of a replacement. Terms and Conditions for the previous CEO were more generous on an exceptional basis. re?ecting the challenges for lfirvia in establishing Irish Water as a. subsidiary. As this ohase has now been compieted, terms and conditions revert to those normaiiy applicable for this position. in particular the previous salary of ?250,000 drops to ?225,000 which. is in the current specified range for this role 90,01 4 to ?238,727?) (j)rditiarily l-fiealth Insurance is not__paid for by the compaey but requested in this case and supported. by the NewEra report attached. Speci?cally NeWEra recommend: "'Llhder the relevant legislation, appointment of the is a matter for the Board and accordingly (and the relevant Government Departments) have not been. involved the recruitment process. in the context that the liioard has strongly advised that they have one recommended. candidate only and that the above remuneration terms are required. in order to secure that candidate, and given Iiirvia's role in the critically iirtportaot delivery of water services in the State, we recommend that relitmce is placed on the Board?s assessment of the required remuneration terms and that the requested approx-ails are given, subject to the proposed form of contract of employment being in a form and on. terms acceptable to the relevant Government Departments. Such contract should ensure ?exibility as regards the nature of the role should there be any restructuring of the Ert-"ia. group within the term of the gov.ie/apps/eSubmissions/ lavouts/ 1 5/ .. 12/07/2017 . .. - Print Submission Page 4 0f 4 . {En the baSiS of ?3133 ramimzumdaiion, and i255 madorsemimi: by iikpz-iriimm 03 IE?I-Ecms??g ?aming and Lacz? {Ei?'?rernmamv {he DepartQO of i3u?3iic ifixpend?ture and Refm?m {he appoi.::zmm:zt afihe {3:535:10 am the {arms and Speci?ed. 12/07/2017 Strictly Confidential and Commercially Sensitive for the Purposes of the Freedom of Information Act Report Ervia CEO Remuneration ?in: Minister for Housing, Planning, Community and Local Government Minister for Public Expenditure and Reform Ministerfor Finance (together the "Ministers?) From: Date: 25 April 2017 Subject: Ervia CEO Remuneration 1. Background I Having regard to the relevant requirements of the Code of Practice for the Governance of State Bodies and section 16 of the Gas Act 1976 (as amended by Section 37*of the Gas Regulation Act 2013) Ervia sought the approval of the Ministers on 25 November 2015 in relation to terms and conditions of a Chief Executive Officer in order to enable the board of Ervia ("Board") to commence the process of recruitment of a new CEO (the incumbent CEO retires from the position in May 2017). 3 By letter dated 18 January 2017 from the Department of Housing, Planning, Community and Local Government approval of the following terms and conditions was confirmed: Term 7 years Notice period Not less than 3 months, not more than 6 months Basic salary per annum ?220,000 The use ofa car provided by the company on Car terms determined by the company from time to time. Pension Choice of: contributory defined benefit scheme; defined contribution pension scheme; or company pension scheme (if already a member) i.e. as set out in the standard template contract- Health Insurance The Employee shall be entitled, if he/she so wishes, to participate in private health insurance through the Company?s group membership, and if he/she so participates the Company shall deduct the amount of the relevant premium from the Basic Salary. Holidays No more than 30 days The recruitment process has now concluded and Ervia has sought Ministerial approval for a variation in certain of above terms. 2. Summary of process undertaken by the Board as outiined bv Ervia Gnl?omh?a?lreacht Bain?ii'tfo?hta an Chista?in Nilsl?nta Natlbnal'Treasury Management Agency Mum New??h 1 :?mh 4,1,1 41, :5 Strictly Confidential and Commercially Sensitive for the Purposes of the Freedom of information Act 3. recommendation Under the relevant legislation, appointment of the CEO is a matterfor the Board and accordingly (and the relevant Government Departments) have not been involved in the recruitment process. In the context that the Board has strongly advised that they have one recommended candidate only and that the above remuneration terms are required in order to secure that candidate, and given Ervia?s role in the critically important delivery of water services in the State, we recommend that reliance is placed on the Board?s assessment of the required remuneration terms and that the requested approvals are given, subject to the proposed form of contract of employment being in a form and on terms acceptable to the relevant'Government Departments. Such contract should ensure flexibility as regards the nature of the role should there be any restructuring ofthe Ervia group within the term of the CEO. Gnlomhalreacht Balnistiac'hta an Chisle?ln N?isiunta w. National Treasury Management Amen? 7 I Move "mm 2