€75,000 Award for Unpaid CEO Salary: What Employers Can Learn from Boardroom Pay Disputes
A recent decision of the Workplace Relations Commission is a timely reminder that salary arrangements must be clearly documented and consistently applied — even at senior executive level.
The chief executive of a green energy technology company was awarded more than €75,000 after the WRC found he had been unlawfully denied salary during a boardroom dispute.
For employers, the case highlights the risks of relying on informal salary arrangements and assumptions rather than properly documented contractual terms.
The Background
The CEO argued that his salary had been agreed in writing at €200,000 per year, with later increases contemplated in a business plan linked to the shareholders’ agreement.
However, while the company was still pre-revenue, he accepted a lower level of pay in practice.
The dispute arose after tensions developed within the business. The CEO claimed that:
- His salary was stopped without lawful basis;
- He raised a formal grievance;
- He reduced his hours as a temporary measure, not as a resignation or waiver of pay.
The company argued that:
- Salary increases required formal board approval;
- The executive had voluntarily reduced his pay;
- Wages were not payable after he reduced his working time.
What the WRC Found
Adjudication Officer Ewa Sobanska found that:
- The business plan did not create enforceable contractual rights to the higher salary figure;
- There was insufficient evidence that the executive had voluntarily agreed to a permanent reduction in salary;
- The applicable salary was €200,000 per year;
- The CEO was entitled to unpaid salary for the relevant period.
The WRC ordered payment of:
- €66,666.68 for four months of unpaid salary; and
- Additional compensation for the period during which he worked reduced hours.
Total award: €75,127.
Key Employer Lessons
1. Informal Salary Reductions Can Create Significant Liability
Where senior staff accept temporary pay reductions to support a business, employers should document:
- Whether the arrangement is temporary;
- The duration of the reduction;
- Whether deferred sums remain payable.
Absent clear agreement, the original contractual salary may remain enforceable.
2. Business Plans Are Not a Substitute for Contracts
Business plans and shareholder documents may provide context, but they are not necessarily binding employment terms.
Contracts and board approvals should clearly set out salary entitlements.
3. Payment of Wages Obligations Apply at Every Level
The Payment of Wages Act 1991 applies equally to senior executives and junior employees.
If wages are withheld without legal basis, substantial awards may follow.
4. Boardroom Disputes Require Careful Handling
Commercial disagreements often overlap with employment rights.
Employers should seek legal advice before:
- Suspending salary;
- Altering contractual terms;
- Assuming reduced work means reduced pay.
Practical Lessons for Employers
To reduce risk:
- Review executive contracts regularly;
- Record all salary changes in writing;
- Ensure board decisions are properly documented;
- Distinguish temporary accommodations from permanent variations;
- Obtain legal advice before withholding salary.
How Ormonde Solicitors Can Help
At Ormonde Solicitors, we advise employers and company directors on:
- Executive service agreements;
- Board and shareholder disputes;
- Payment of wages claims;
- Contract interpretation;
- WRC representation.
If your business is facing a senior management dispute, early legal advice can help prevent costly litigation.
📞 Contact us today for confidential guidance.
Disclaimer: This article is for general information purposes only and does not constitute legal advice.
Ready to Take
the Next Step?
Book a Call
Schedule a consultation with our team to discuss your legal needs and explore your options with confidence.
We Handle the Details
Trust our experienced solicitors to manage your case with precision and care, keeping you informed at every step.
Achieve Your Desired Outcome
Let us help you secure the best possible result—whether it’s a fair settlement, legal resolution, or peace of mind.
Arrange a Call Back or Send a Query
We are honoured to share that Ormonde Solicitors & Employment Matters has been named the Business All-Star Labour & Employment Law Practice of the Year 2025. This prestigious recognition from the All-Ireland Business Foundation reflects our ongoing commitment to fair workplace practices and expert legal representation, led by the dedication and vision of Sean Ormonde. We are deeply grateful to our loyal clients, dedicated team, and the AIBF for their continued support and trust.
