Paschal Donohoe (Dublin Central, Fine Gael)

Share-based remuneration refers to compensation provided to employees in the form of company shares or stock options. It is often used to incentivise and retain workers. The Deputy has proposed a report on the impact of PRSI exemption for share-based remuneration for large corporations on the sustainability of the SIF. As Deputies will know, employer PRSI generally does not apply to share-based remuneration. The employer's PRSI exemption does not apply to cash, settled awards or any cash payment that follows the value of the shares.

Last year, an independent review of share-based remuneration carried out by Indecon on behalf of my Department was published. This review makes a number of recommendations pertaining to share-based remuneration and this exemption specifically. The review found that the PRSI exemption was regarded as an important support for SMEs and other businesses in Ireland. Recommendation No. 1 of the review suggests that a cap on the level of the employer PRSI exemption should be considered. As part of the process of determining future policy in the area, consideration is now being given to recommendations in the review. In relation to this, my Department has now engaged with relevant stakeholders and will continue to do so. Consequently, I do not consider it necessary to carry out a further review of the PRSI exemption for share-based remuneration at this time.

This is related, in a way, to the discussion that we had earlier on with Deputy Nash. While Deputy Nash was raising a very different policy matter in relation to the need to look at how we could support the development of ESOPs, I stated in that discussion that my Department was going to be doing more work in the entire area of share-based remuneration. While I do not believe a report on this matter is merited in the way Deputy Doherty articulated, this is a matter that I would be happy to engage with him and the committee on. I know that shares are an important part of the compensation of employers and are an important way of keeping valued workers in a company that has employed them, but I accept that there are different policy issues we have to tease out regarding the level of support that is available to those schemes, whether it is appropriate and whether it should be increased or decreased. We heard one call earlier on in relation to ESOPs - I know that was a different matter to this - and Deputy Doherty is now making a call in a different area. My takeaway on this is that it is an issue that, in general, needs more work. I would be happy to engage with the Deputy and the committee on this as we analyse further and maybe make decisions in advance of future finance Bills.