Mr. Declan Doyle:

I am afraid it is privileged. The legal advice from our lawyers is that this is privileged information.

In relation to Mr. Flannery, we also wrote to him on Thursday, 3 April 2014, and formally requested that he indicate the detail that he will give us permission to communicate to this committee in respect of his remuneration as chief executive of the Rehab Group as well as pension provisions. In correspondence received from Mr. Flannery he stated, and again I quote, that he "was unable to assent to the disclosure of any personal informational in relation to his remuneration or pension entitlements".

As Mr. Kerr stated earlier, the board's approach to this hearing has been to meet the requests of the PAC wherever possible. However, in this instance, meeting the requests of the committee would involve Rehab breaching the law as it relates to the former chief executive and Mr. Flannery, something that members will understand we cannot do.

Let me turn to the recent issue of salary disclosure for senior executives within the Rehab Group and its companies. The remuneration committee sets the salaries of Rehab Group's senior management team only, that is, the eight posts that presently form the group management team. One of these posts is now vacant and has been for the past three weeks. The committee does not have role in any posts outside that circle. In line with the approach to the former chief executives to ask for permission to publish salary details, the Rehab Group has asked the seven senior executives who comprise the senior management team for their permission. These individuals have taken the step of waiving their rights under data protection and personally given us permission to communicate details of their remuneration and their post to the PAC. This information has been provided to the clerk and it will be circulated to all members.

It is important to highlight the very broad and significant role that each of these individuals holds in the Rehab Group. All have international responsibilities across the organisation and have operational responsibility for our training, health, social care, rehabilitation, employment and education service as well as for our central services. These services are areas such as human resources, finance, IT, communications, policy and service compliance, health and safety and procurement.

Four other managers outside the remit of the remuneration committee are in receipt of salaries greater than €100,000. Given that they are outside our remit, we have not asked them to waive their rights.

In publishing these salaries, we hope this disclosure will be taken in the spirit in which it is given. The individuals in question have given permission for this information to be made public in the interests of greater transparency. As members will be aware, many individuals within the group have been subject to undue professional and personal attention in recent weeks. We ask that the privacy rights of these individuals are not further impacted by virtue of this voluntary disclosure.

Rehab has already submitted to the committee details of all salaries of more than €65,000 paid to employees of the group in its Irish divisions. The information is provided in bands of €10,000, which is line with best practice for charities' reporting or SORP. Members are probably aware of this term, which Mr. Poole will address shortly.

I take this opportunity to provide the committee with additional information in respect of the report provided to the Rehab Group board by Towers Watson entitled, the 2014 Remuneration Review of the Rehab CEO and Senior Management Team. The salaries of the executive team members of the Rehab Group are set by the remuneration committee of the Rehab Group, which commissions independent reports on salary levels in general Irish industry to advise it in carrying out its work. As part of this process, the responsibility of each post is individually and independently assessed internally and externally. In developing a policy for setting remuneration, the board has traditionally looked to the market median, which is basically the middle of the general pay market or the point at which 50% of wages will be higher and 50% lower, to guide decision-making on pay levels and individual pay positioning. Independent reviews of the posts within the executive team take place regularly, most recently by Towers Watson in 2014.

I confirm that the report provided to the committee on 11 March is the full report produced by Towers Watson and provided to the board on 17 February. It provides details of information provided to the group board to inform it in relation to decisions made by the remuneration committee charged with oversight in this area. Many members of the committee have sought additional information in relation to this report. It is usual in organisations that use a remuneration committee for the board to receive a report without any specific personal data in it and that this level of detail and personal data is restricted to the remuneration committee. A more detailed working document, containing personal data, presented by Towers Watson for use by the remuneration committee was used to inform the development of the final report. We have sought the permission of Towers Watson to disclose this discussion document to the committee and, until this morning, it had given us permission to do so, with a certain level of information redacted. In the light of Ms Kerins's recent letter to us, which Towers Watson has seen, the company is not prepared to include in the report certain information which is in the public domain and of which all members are well aware. In the report the committee will receive from Towers Watson, which is the full report, all information relating to the chief executive has been redacted, even though, as I say, this information is already in the public domain.

Members of the committee have raised the issue of Rehab's pay policy and philosophy. Many years ago, the Rehab Group took the decision to benchmark senior salaries, that is, those of the senior management team and chief executive, against commercial industry norms prevalent in general industry in Ireland. This decision was taken to reflect the size, scale and diverse activities of the organisation and its international reach.

In line with the sentiment referred to in Mr. Kerr's statement, the remuneration committee accepts that we have not given adequate attention to comparisons with organisations in the charity and not-for-profit sectors. The Rehab Group is a large organisation which provides a vast range of excellent services to thousands of people and operates in a number of different industries. We employ more than 3,500 staff, and this number is constantly growing. The organisation has consistently maintained employment growth in the biggest recession this country has seen. However, we have asked Dr. Molloy, in his review, to consider how we can align ourselves more closely with the charity and not-for-profit sector.

I reiterate Mr. Kerr's statement that by engaging Dr. Molloy to lead a review and transformation project in relation to the governance arrangements in Rehab, we believe we have taken an important step. The review will challenge us to confront candidly the issues before us, rebuild our reputation and staff morale and enhance the effectiveness of the organisation. I will hand over to Mr. Keith Poole who will provide further insights into the financial management of the Rehab Group.