The Chairman of Allied Irish Bank, David Hodgkinson, told staff this that the payment of significant deferred bonuses reflects banking practices of the past and does not reflect how AIB will conduct itself in future.
Hodgkinson said the bank was contractually obliged to pay outstanding bonuses it had withheld under the terms of the bank guarantee after an employee won a test case against them.
Hodgkinson told the press: “The issues we are facing mean that the bank currently relies on Government and taxpayer support and I am working to ensure that, in future, our pay and benefits policy is more reflective of our organisation’s responsibilities, performance and of the economic climate.”
The Irish High Court ordered the bank to pay 160,000 Euro to trader John Foy, who was one of about 90 staff who had taken legal action against the bank over the unpaid bonuses.
The eyebrow raising extent of the bonus payments made to AIB staff was referred to by the Irish Minister for Finance Brian Lenihan during a parliamentary question time last week.
Some 2,869 employees were paid 58.65 million Euro in bonuses, of which 35.5 million Euro was paid over last month following the court ruling early last month.
A further 3.7 million Euro in bonuses will be paid to staff for deferred bonuses from 2006 and 2007 and booked in the bank’s 2010 accounts.
The remaining 2.4 million in contractual bonuses was paid to junior and clerical staff in AIB call centres and in the bank’s offices in Jersey and the Isle of Man.
62 senior executives shared 11.11 million Euro, or an average of 179,000 Euro each for 2009, while 674 managers shared 30 million Euro or an average of 44,000 Euro each.
Public outcry about the payouts intensified when it was revealed that AIB requires another 9.8 billion Euro on top of 3.5 billion Euro already paid out by the Irish taxpayer to meet the banks losses, which were mostly incurred on property lending.
Moving to Ireland
After living in Ireland for almost one year, this is what I’ve learned