IMO chief exec lump sum

Dear colleague

As President of the Irish Medical Organisation (IMO) I wish to respond to media reports regarding the resignation of the CEO of the organisation, Mr. George McNeice.

The circumstances of Mr. McNeice’s resignation as CEO are extremely controversial and will cause great distress to members of the IMO as they have to myself and my colleagues on the Management Committee of the organisation; not least given the financial difficulties so many of our members are facing.

Mr McNeice acted within his rights given his contractual entitlements. However his contract was negotiated many years ago and in a form which left the organisation very exposed to changing economic circumstances and changes in legislation particularly in respect of pension provision and salary increases. I share the anger which I have no doubt all members will feel in relation to this matter.



The facts are as follows:

The Chief Executive initiated discussions with the organisation some time ago about the provisions for his retirement. In response the organisation undertook a comprehensive review of the matter including detailing any and all liabilities of the organisation on foot of the CEO’s contractual entitlements and all options available to us in this matter.


The IMO sought and received advice from various independent parties including actuarial advice, taxation advice and legal advice from two independent Senior Counsel. That legal advice clearly stated that the organisation could not expect to win any legal challenge to the contractual entitlements held by the CEO.


As a result of this legal advice, the IMO had no option but to initiate talks with the CEO in order to secure a settlement of the matter. Our overriding priority has been to ensure that the organisation retained sufficient financial resources to enable it to represent the interests of our members and to support those members in respect of their work in the Irish health services.


Through this process extensive efforts were made to achieve a resolution at a lower cost to the organisation. However these were unsuccessful.


Intensive negotiations with representatives of Mr McNeice then took place over recent weeks and concluded with a legally binding agreement between the two sides which was signed this week. This agreement secured the resignation of Mr McNeice as CEO of the IMO and of all other offices which he held in his role as CEO of IMO. Mr McNeice has no active management role in the organisation since yesterday.


Because of the legal sensitivities surrounding this matter, I am sure people will appreciate that we unable to consult fully with members. However we did organise a full briefing on this matter while the process was in train for Trustees, member of the Management Committee and other relevant members of the organisation on Monday night last. That briefing included contributions from two independent barristers (Senior Counsel) who were retained to advise the Management Committee on this matter.


Following that briefing, the Management Committee (which has responsibility for this area under the rules of the organisation) met formally and unanimously agreed that the proposed settlement represented the only option for the organisation to take given the liability it faced. Everyone at that meeting was appalled at the circumstances in which we found ourselves but acted in the best interests of the organisation given that there were no other options available to us.


In that settlement agreement, the Management Committee secured a reduction of approximately 50% of the organisation’s legal liability to Mr. McNeice arising from his contractual entitlements.


It has been established on the basis of independent taxation and actuarial advice that Mr McNeice had contractual entitlements to pension and other provisions of circa €20 million.


The settlement negotiated by the IMO reduced the cost of the settlement to approximately €9.7 million –including a pension fund of approximately €4.5 million, a contractual termination payment of €1.5 million and delayed pension payments of €3.75 million (representing a cost of €2.6 million at today’s values).


Membership subscriptions in the future are protected and will not be required or used to finance this settlement given that the IMO has made full provision for these payments from its current resources.


That settlement also required the organisation to issue an agreed statement yesterday to announce Mr McNeice’s retirement.


Despite this settlement, the IMO remains in a very strong financial position and has the resources it requires to continue to represent members and develop policy as currently. This settlement is being fully provided for in our financial accounts and all relevant details will be disclosed in full in the next set of accounts.


I have put in place interim management arrangements involving a sub-committee of the Management Committee to oversee the day-to-day management of the organisation over the coming months.


The sub-committee is made up as follows:

Dr. Paul McKeown President

Professor Sean Tierney Treasurer

Dr. Matt Sadlier Incoming President

Dr. Ray Walley Chair GP Committee

Mr. Niall Saul Acting Executive



Prior to this episode, I had initiated a comprehensive review of Governance Procedures at the IMO. I have now extended the Terms of Reference of that review to include specifically a review of all processes, practices and procedures around the issue of Remuneration to ensure that nothing like this can ever happen again and that there is clear transparency and full risk assessment in respect of key contracts in the future.


I am convening a special meeting of members on Saturday 12th January next. Further details will issue in due course.


Yours Sincerely



Dr. Paul McKeown

President