Allied Irish Bank set to pay out $53million in bonuses

Toxic Bank will pay out generous bonuses

CATHY HAYES,

IrishCentral.com Staff Writer

Published Thursday, December 9, 2010, 4:55 AM

Updated Thursday, December 9, 2010, 5:05 AM

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Allied Irish Bank HQ, Dublin

Struggling Allied Irish Bank is set to dish out almost €40 million ($53 million) in bonuses to staff this month in the wake of the worst banking crisis to hit Ireland.

The latest reports suggest that the bank is will pay all staff who were contractually entitled to deferred 2008 bonuses in their December pay packet.

The substantial pay out comes after John Foy, a trader with the bank, took successful legal action against AIB for payment of a deffered bonus of €161,000 ($214,000).

Up to 90 other employees in the banks capital markets division have issued similar legal proceedings against the bank.

Due to the Government's bank guarantee scheme, AIB had been restricted from making the payments.

Speaking in the Irish Parliament recently, Finance Minister Brian Lenihan confirmed the payments were going to be made as a result of the legal action.

"The awards made in 2009 to staff in AIB Capital Markets in respect of 2008 were deferred and subsequently paid following threatened or initiated legal action," he said.

An estimated €35.5m ($47million) will be paid after the High Court Judgment against the bank.

Nster.com

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seamusmoore | Dec 10, 2010, 06:06 AM EST

@eiriamach AIB does not have any American directors on their board since they sold their US subsidiary in Baltimore, Allfirst back in Sept, 2002. Allfirst had a rogue trader named John Rusnak who lost $691 million in 2000. Those were the good old days: when bank losses due to mismanagement were under $1 billion. BTW, those primarily responsible for toxic debts work for the banks' commercial lending division. The Board of Directors are at fault for failure to monitor the crazy lending practices to developers.

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eiriamach | Dec 10, 2010, 04:14 AM EST

Why isn't AIB taking legal action against the American bankers who sat on its board and counseled the reckless investments in toxic debt?

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seamusmoore | Dec 09, 2010, 08:13 PM EST

The Irish govt should not have taken on the banks' problem loans making them an obligation of the Irish taxpayer. The risk of default on these loans should have left with the bondholders of the banks and the foreign banks that recklessly loaned money to Irish banks, NOT the IRISH TAXPAYER. Direct your frustration/anger at your ELECTED officials who wrote a blank check on your behalf. You should have been screaming when NAMA was created, not now. Also, back in 2008, the IRISH GOVT guaranteed ALL DEPOSITS regardless of size (in the US, the FDIC only guaranteed depositors up to $250K per account), effectively insuring the rich at taxpayer expense. Irish voters elected to office officials incapable of managing a crisis; if you live in a country that ignores the rule of law (contracts and such), then you are living in a banana republic. Who do go after next, those who sold land to developers at absurdly high prices?

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Ratslayer | Dec 09, 2010, 06:38 PM EST

Good one, Seamus. Let's apply yer logic to this: why the heck should the middle-class taxpayer shoulder the burden of bailing out these criminal/terrorist enterprises we nicely call banks?? The taxpayers aren't the ones who sent the banks into the ditch! Wake up. These bonuses, like the ones paid to all those sociopathic American bankers, serve to only undermine what little faith the little guy has in our horribly corrupt and bankrupt economic system.

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seamusmoore | Dec 09, 2010, 05:20 PM EST

Some of you might want to consider that there might be areas of the banks that are profitable and that the people who work in these areas are entitled to get paid according to their employment CONTRACT. Just because AIB's lending division employees made horribly bad judgements in who they loaned money to and for what projects, why should employees in other areas that have made money for the bank (which help to offset the losses from lending activities) be punished and not be paid their contractual obligations. If not for Mr Foy and the Capital Markets division, AIB would have reported even larger losses.

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forflann | Dec 09, 2010, 04:47 PM EST

OMG sounds just like the US! Are bankers all money grubbing Shylocks?

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LoyalCitizen | Dec 09, 2010, 09:04 AM EST

I always wonder which mathematical genius calculates the repulsive bonuses.

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