Former AIB managing director Colm Doherty at an egm in December 2009Irish Times

The bankers are it again – the State owned AIB has just paid over $4 million to the managing director forced to quit as a condition of the second bank bail-out last November.

Colm Doherty’s huge pay-out is revealed in the 2010 annual report for AIB due to be published shortly but obtained ahead of publication by a number of Irish newspapers.

Finance Minister Michael Noonan has reacted to the shocking news by claiming that the payment dated back to the reign of the previous Fianna Fail led government.

Minister Noonan then promised to re-examine the approach to bankers’ remuneration.

Minister of State Simon Coveney described the payment as ‘inappropriate’ and admitted it will cause widespread anger and disbelief amongst the Irish public.

The Irish Times reports that Doherty received the huge payments under a contract agreed when he was promoted in November 2009 to the role of managing director in place of chief executive Eugene Sheehy.
Doherty received a salary of just over $600,000 from January to November of 2010. He was paid a million dollars in lieu of the year’s notice on his contract when his deal was terminated at the direction of former Finance Minister Brian Lenihan.

A member of the AIB board since 2003, Doherty also received almost $3million in pension contributions when he was forced out of office.

Current Finance Minister Noonan added: “The payment is part of a very strong legacy from the previous government which we are trying to clear up.

“This Government will be making decisions to make sure it doesn’t happen again. Now that the Nyberg report on our banking system is going before Cabinet today we’ll be taking decisions going forward that matters like this don’t happen again unless they are under contract.”

The news has been met with a mixture of amazement and derision by all sectors of Irish life.

Larry Broderick, general secretary of the Irish Bank Officials’ Association, told the Irish Independent: “We are appalled by this news. It beggars belief that a chief executive of an organization which made a €12 billion loss can walk away with a €3 million pay package.

“At a time when over 2,000 bank workers are to be made redundant there seems to be one rule for those at the very top who have destroyed the organization and another rule for the ordinary staff on the ground.

“I don’t believe the culture at the top has changed. This incident is totally unfair.”

Broderick also called on the government to take real action against those still running the banks.

He said: “Government has said they are coming in with a clean sheet, they want to try and radicalize the industry and change the culture, well this is the opportunity for them to come and see can they do anything about it.

“If they can’t address it historically then they have to address it into the future and they have to ensure that all staff in the industry are treated in a fair minded way.”