'IMO funds healthy despite massive CEO payout'

  • Niall Hunter, Editor

The beleaguered doctors' union, the IMO, says it is in a healthy financial position despite the controversial huge salary and pension payout to its former CEO George McNeice.

The IMO says its latest published accounts show that after making full provision for the settlement with its former CEO, it still had reserves of members' finds amounting to €3.2 million.

The Organisation has now given details of a settlement totalling nearly €10 million with its former CEO, who had a salary of around €500,000 per year. Mr McNeice, in addition to a huge pension fund and settlement lump sum, is to get 'staggered' payments of between €200,000 and €250,000 from 2016 to 2032.

The IMO's internal governance and financial management in the wake of the CEO controversy are due to be debated at an extraordinary general meeting of the Organisation in Dublin on Saturday March 23.

The accounts give details of the settlement terms agreed with Mr McNeice.

'We were determined that members would have full details about the settlement were were forced to make with the former CEO and I believe these accounts do that," the IMO's Treasurer, Sean Tierney said.

It is understood there had been previous requests made that the details of the settlement should remain confidential.

The accounts show that in addition to a pension fund of some €4.5 million, the former CEO will receive a termination lump sum of nearly €1.5 million 'as provided for in his contract.'

In addition, he is due to receive annual payments as part of his termination arrangement of some €200,000 per annum from 2016 to 2021 and €250,000 per year from 2021 to 2032. The present value of these payments is some €2.68 million, according to the IMO. However their total final value will be around €3.75 million, giving a total payout to Mr McNeice of some €9.75 million.

It is understood that the staggered annual payments were agreed in order to reduce the financial burden on the IMO of the total amount which would have originally been due to be paid to him in a lump sum as part of the settlement agreement.

The final total package agreed with Mr McNeice was negotiated downwards from around €20 million.

Mr Tierney said in addition to providing over €4 million in 2012 for the settlement with Mr McNeice, the Organisation had to take a write-down of over €4 million on the value of its headquarters in Dublin 2 following the property crash.

"Despite this, we continue to have reserves of over €3.2 million and we can confirm that no members' subscriptions over the coming years will be required to fund the settlement with the former CEO," Mr Tierney said.

The accounts state that while the IMO had a net deficit of €6.18 million last year, its total assets exceeded its total liabilities by €3.29 million.

The accounts report 'for the first time in full' the income and expenditure of the IMO and its wholly-owned subsidiary, the financial services company IMOFS, the IMO said.

The Organisation's financial services company made a profit of €429,000 last year, according to the accounts.

The accounts also show that Mr McNeice's legal representatives were paid €20,600 in fees as part of his settlement agreement. Directors' fees in the Organisaiton amounted to €139,000 last year.

The accounts show that in 2012, the IMO generated income of just over €5 million, down 11% on 2011.

The IMO said it reduced its cost base by 17% last year.

The accounts show that the IMO had 5,053 members at the end of last year, down 286 on the previous year. The current average salary of IMO staff is just over €52,000.

Mr Tierney said there was no evidence that disquiet over the settlement with the CEO had led to an increase of any significance in the number of doctors leaving the Organisation.

Warning on future of doctors' union

 

 

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