The Tribune

By AVA TURNQUEST

Tribune Staff Reporter

aturnquest@tribunemedia.net

FORMER National Insurance Board chairman Patrick Ward yesterday advised executives to seek legal redress after their management bonuses were revealed to the public.

Referring to the attack on director Algernon Cargill by a tabloid website, Mr Ward defended the rationale for executive bonuses, adding that the release of the figures was a clear violation of the Data Protection Act.

Mr Ward said he could not confirm or deny the accuracy of the figures due to the legislation, which sets out the legal framework for the collection, use and disclosure of personal information.

“I think it’s highly inappropriate and against the law,” he said. “Whoever is responsible should be prosecuted, and anyone that has been the victim of this should seek whatever means is available to them. This is a significant invasion of privacy.”

The website accused Mr Cargill of “abusing the system” through his alleged receipt of executive bonuses, totaling just under $200,000, over a three-year period.

A spreadsheet photo outlining the disbursement of the bonuses for the period January 2010 to May 2012 was also posted, revealing the amounts paid and corresponding cheque numbers to eight executives .

At a press conference to reaffirm the board’s competency in light of recent allegations surrounding chairman Gregory Moss and Mr Cargill, Bernard Evans, chairman of the Human Resources Committee, said that all bonuses set by the previous board have been stopped pending reassessment.

At yesterday’s press conference, Mr Evans said: “The bonuses that executives may have enjoyed under the previous board that will not continue under this board, we have been given that mandate. I’ve been given strict instructions (from the board chairman) that the bonuses must be put on hold if not stopped.”

When asked to confirm whether or not there had been any new salary increases awarded, Mr Evans said recommendations for upgrades were still being processed and had not been given final approval. He added that nominees were evaluated using NIB internal processes, which are union-endorsed.

Director Philip Beneby, who is chairing the audit ordered by Prime Minister Perry Christie, said: “We can’t comment on specific bonuses because the audit committee has not really audited or reviewed that aspect as yet.”

In an interview with The Tribune, former chairman Patrick Ward pointed out that Mr Cargill’s compensation package was not awarded arbitrarily but part of an across the board programme to establish a direct link between compensation and performance.

While he cautioned that the entire compensation package should be taken into consideration, Mr Ward maintained that the Executive Bonuses programme was approved by the Human Resources Committee and the Board of Directors, not executive management.

Implemented in 2009, the programme followed recommendations of two independent studies which stated that senior management compensation was not competitive, and called for a system that would bring the approach more in line with the private sector. Acknowledging that management was not being paid equal to industry peers in both the public and private sector, executives were evaluated based on organizational objectives and the achievement of job specific goals.

Mr Ward said that the bonus programme was chosen over salary increases, because the former would not engender an increase in fixed costs and introduced motivation factors.

“When we reviewed the system, we decided that rather than having a situation of automatic bonuses, we had management achieve specific targets,” he said.

“There was a major push towards collections and compliance.”

Mr Ward added: “No one can argue that NIB has made significant improvements to its collections rate, and level of compliance.”

In last year’s annual report, published on it’s website, the corporation posted a 13.7 per cent increase in total net contributions income.

Speaking to The Tribune yesterday, Mr Ward noted that the current practice of “cherry-picking” select persons to give compensation has put the compensation package “out of alignment”.

“What is interesting about these increases is unlike those earned by Mr Cargill and all the other executives, we don’t know what the rationale for these are,” he said.

“How can you pick and choose who gets what, and on what objective criteria are you using?”

See today’s Insight for more on the NIB controversy.