Joe O'Toole (Independent)

Let me talk about abolishing it. That is a little like the Minister's response to the last recommendation. Nobody is saying all property tax reliefs are bad.

Bonus schemes are good, but badly implemented bonus schemes are bad. That is the problem. It is not just the bonus scheme but the points that were dealt with by Senator Boyle. Incidentally, I have raised this with at least half the Cabinet over the past five years. I have asked each Minister if he or she has been privy to or involved in the determination of the bonuses for the assistant secretaries in their Departments. I will not embarrass the Minister with the answers. I have also met Ministers who thought they saw the bonus scheme but I know what they saw. It was the outline scheme on which the bonus scheme is based.

The bonus scheme is very clear, and that is the reason it is very good. Before the year begins, stretched objectives are determined. These are not the objectives that already exist but objectives that are above and beyond one's normal day's work. These stretched objectives are written down and agreed. Next, an absolute weighting is put on the objectives, that is, what one gets if one achieves each one. Now the customer knows what is to be achieved and what he or she will get if he or she manages to achieve them. How will we know he or she will achieve them? There are the key performance indicators, KPIs. One looks at these at least twice in the course of the year and at the end of the year one makes the assessment. That assessment is written down and on that basis one decides on the quantum or amount of the bonus. It is not just the figure but how the figure was achieved and set up.

I have sat, and still sit, on a number of remuneration committees. One of the bonuses with which I was involved managed to get front page coverage on the Irish Independent recently. It was for a very hard working chief executive of a semi-State body. The bonuses attached to that position ran to 20 A4 pages in terms of the structure. I believe we should have explained to the public what can be achieved by bonuses, culminating in the point outlined by Senator Alex White whereby we point out that the person was given a certain amount. One of the big changes the Minister will have noticed in the debate on bank bonuses, particularly in the UK, Europe and the US, is that we are now working on the basis that where bonuses are being paid in well-run banks, they are only paid long after the event. In other words, it is not based on the performance this year but perhaps next year or the year after and there is a continuing gain.

If bonus schemes are properly implemented, they are a good thing. At present, they are in a haze of ignorance. People know nothing about them other than the amount. There should be openness not just on the amount, but on how it was achieved. I ask the Minister to reconsider that position in terms of where it works. People are annoyed because they do not know why the recipients are being paid and the money appears to be too high. Generally, it is too high. However, if we are running the banks, and regardless of whether the amendment is acceptable as part of the Finance Bill, it would be useful to hear from the Minister that there will be openness and transparency in the method of determination, the outline of the objectives, the weighting, assessment, the key performance indicators and the quantum given at the end, so people have a full understanding of it.