Executive summary - Udo Bullmann

2.6 Management policies and shareholders activismOwing to the high number of transactions that has occurred at eircom a disturbing amount of money has been paid toan elite group at the top of the company. At the original sale the CEO left with millions gained in the deal. WhenValentia took the company private this pattern was repeated among top management. The same can be said of thesecond IPO and the subsequent BCMIH purchase. The amount paid to advisors acting for the management and theequity fund on these corporate deals is also very difficult, if not impossible, to explain to the ordinary worker. Duringall this, of course, the company’s debt level only increases. Currently this stands at €3.8billion.In summary these transactions have not brought stability to the business. High dividends and, particularly,management fees are to the detriment of the long-term financial health of the company. They affect the investmentportfolio and the commitment is usually short term. The workers and unions have keenly felt these changes but theESOP has enabled certain financial returns as well as some level of control of the changing environment.