AIBs Two Fingers To Lenihan

Seth Brundle

Pay for new AIB boss 'to exceed salary cap'

17/11/2009 - 07:15:59

It has reported this morning that a salary cap of €500,000 will not apply to the next top banker at AIB.

According to today's Irish Times, Colm Doherty is paid more than €630,000 a year in his current position as a senior executive at the bank.

He is expected to be appointed managing director of AIB shortly - but will not be forced to take a pay cut.

Finance Minister Brian Lenihan set the salary cap for a bank 'chief executive' earlier this year, however there has been speculation ever since that the pay limit would put off external candidates who would otherwise be interested in such jobs.

http://www.breakingnews.ie/text/business/eymheyojgbql/

Who is in charge?

Rev. BlueJeans

Thanks KB, I was just coming here to post the same thing!

MaceFace

kbannon wrote: »

http://www.breakingnews.ie/text/business/eymheyojgbql/

Who is in charge?

Obviously not a minority share holder.

markpb

This is ridiculous. The government wanted an outsider - AIB said no. The government wanted a wage cap for the MD - AIB said no. The government wanted a wage cap on the chairman - AIB said no.

I'm not in favour of whipping the carpet out from under the bank just because they're inept but this is crazy. Do the government have any balls?

SLUSK

This is what happens when you do not let the free market wipe out incompetent bankers. I said it before and I said it again, these ridiculous salaries and bonuses could not continue without subsidies from the taxpayers. Unless you let the market work things out, these things will continue to happen.

End socialism please!

LostinBlanch

Well what do you expect? We have government by, of and for the banks.

F*ck everyone else.

Dannyboy83

We will probably own them and every other Irish bank shortly

http://www.independent.ie/business/irish/bank-of-ireland-set-for-state-ownership-1937094.html

dixierip

After everything that has happened this is beyond belief. If it was happening somewhere else it would be funny.
What is wrong with this country. Are lessons ever learned?

hobochris

To play devils advocate here.. are AIB not a private sector company? Should the government wished to have more influence over them they should have bought shares not just handed money over. :rolleyes:

bernardo mac

Banks Rule OK! Incredible and insulting arrogance.

Liam Byrne

I can't help thinking that this is complete sleight-of-hand misdirection.

As has been pointed out, there are at least 3 or 4 other things that the Government hasn't done it's job on in relation to AIB.

By making it look like AIB is aiming for a higher pay packet, and Lenihan wading in to "save the day" in the interests of the taxpayer, the other 3 or 4 will be forgotten about, AIB will get their way on everything else, and the more gullible will believe that Lenihan has acted in our interests.

Conspiracy theory or the real scenario ? Time will tell.

Diarmuid

hobochris wrote: »

To play devils advocate here.. are AIB not a private sector company? Should the government wished to have more influence over them they should have bought shares not just handed money over. :rolleyes:

AIB would not exist without multiple interventions from the Irish government, (bank guarantee and re-capitalisation). Lenihan had them by the balls then, he should have done the right thing then and taken ownership of a failed company. He blew it. This is a direct consequence of his mistakes.

Dickerty

Considering how they have run the country, do you really think it is a good idea to have this government to run a bank?

Fat_Fingers

User on this board has previously listed all wonderfully accomplishments by AIB superb hard working Management. I think in the light of the latest revelation we need to remind ourself of wonderfully set of skills that AIB has produced over the years.

Quote:

1979 - Charles Haughey settled his million pound debt with AIB on extremely favourable terms after he became Taoiseach. I remember this in particular because the same AIB manager who forgave Charlie his million pound loan threw a woman and her children out her home when she fell behind on her payments for a much smaller loan. The woman was interviewed when this came to light (tribunals) and her bitterness was hard to argue with.

1984 - The ICI (owned by AIB) collapses, due to mismangagement and ineptitude. Irish debt was 116% of GDP. But AIB was "too big to fail", so the Irish taxpaying donkeys were whipped into going into further debt by hundreds of millions to save AIB. Surely the bankers would learn their lesson?

2000 - Irish taxpayers were rewarded by AIB for their help with ICI when the DIRT tax evasion run by AIB came to light. Cheers lads.

2002 - John Rushnak runs up losses of 700 million, due again to incompetence, poor oversight and little or no risk control. But surely the banks would manage their risk properly from now on?

2004 - It comes to light that AIB has been overcharging its customers for FX transactions for up to 10 years. No one in AIB was disciplined or punished despite the regulator report showing AIB management were fully aware of what was going on.

The regulator also discovered that AIB overcharged about 70,000 customers for a variety of services.

2006 - 4 AIB senior executives are landed with tax bills plus penalties relating to Faldor, an investment company used by AIB senior executives. On a related note Faldor gets into trouble for creating artificial trades to enrich itself. Just cant get good help these days. Nobody in AIB was disciplined or punished.

And to add by mid-summer 2008 AIB received €3.5bn of taxpayers money for their "spot of bother" And by the looks of the things AIB will need another €2bn...

This arrogant bank should be allowed to collapse. Its been nothing but a bad news since late 70's. Let the Bord of Director and their close goblins find another great job with their glorious CV (above)

Jimmyboss

The arrogance of AIB is astounding, two fingers up to everybody, how can they possibly justify looking for further recapitalisation and fresh equity???????

force eleven

Why are people surprised by all this? The banks do what they like, their friends and allies in government i.e FF, wring their hands and hang their heads, but let them do what they will anyway.

Economically, this country disgusts me.:mad:

Dickerty

Jimmyboss wrote: »

The arrogance of AIB is astounding, two fingers up to everybody, how can they possibly justify looking for further recapitalisation and fresh equity???????

What makes you think they will attempt to justify it? They don't need to.

drBill

Not just two fingers to Lenihan, its two fingers to all of us. Not for the first time and it won't be the last.

off the top of my head (and dates are approximate):

• July 2009. Permanent TSB, a beneficiary of the state bailout raises mortgage interest rates. Government keeps mouth shut, leaving the way clear for all other banks to go ahead and squeeze more out of already-stretched borrowers. Government could have shown some authority and leadership here which would have gone a long way towards generating some trust and goodwill. But no.
• August 2009. Head of Fas is accused of wasting state money on junkets. Government rewards him with over a million euro and ushers him out the door before he could be held up to account. Taoiseach still maintains that he is an man of honour.
• September 2009. Ceann Comhairle exposed for wasting huge sums of state money on junket after junket. Said Ceann Comhairle eventually resigns begrudgingly. Taoiseach keeps his mouth shut throughout, except to criticise the way the CC was treated.
• October 2009. AIB gives 3.5% salary increase to some staff. Government says it can do nothing about it, thereby sending a clear message to AIB as to who is in the saddle in this little arrangement.
• November 2009. AIB ignores government instructions on directors salaries.
• December 2009. ???

To repeat a commonly used phrase these days: They Just Dont Get It. To me this government have long lost any shred of moral authority they might have had. I couldn't even begin to express how little faith I have in them to get this country back off its knees.

And they wonder why people are going on strike.

old boy

for many years, not only have i detested banks but i actually despise them, i think i will never have my mind changed, thankfully i do not have a bank account, kudos to my local credit union, some times they may be more expensive, but in the past 20 years they have never said no, through mostly bad times.

Seth Brundle

old boy wrote: »

for many years, not only have i detested banks but i actually despise them, i think i will never have my mind changed, thankfully i do not have a bank account, kudos to my local credit union, some times they may be more expensive, but in the past 20 years they have never said no, through mostly bad times.

Bertie, is that you?

Taxipete29

SLUSK wrote: »

This is what happens when you do not let the free market wipe out incompetent bankers. I said it before and I said it again, these ridiculous salaries and bonuses could not continue without subsidies from the taxpayers. Unless you let the market work things out, these things will continue to happen.

End socialism please!

Socialism would of been to nationalise the bank when the problems started. This is not socialism. Its protectionism of corporate croonies of FF.

We are too small a country to have one of the big 2 banks fail. Your precious market would of closed the whole country had AIB or BOI collapsed.

turly

SLUSK wrote: »

This is what happens when you do not let the free market wipe out incompetent bankers. I said it before and I said it again, these ridiculous salaries and bonuses could not continue without subsidies from the taxpayers. Unless you let the market work things out, these things will continue to happen.

End socialism please!

It's corporate socialism, not socialism.

I.e., "Socialise the losses, privatise the profits."

This episode is simply further proof - if any were needed - that the collective noun for banker is a wunch. As in "What a wunch of bankers."

Seth Brundle

hmmm, BL is flexing his muscles?

Lenihan says AIB cap will remain in place
17/11/2009 - 16:02:23

Finance Minister Brian Lenihan tonight threw out plans by Allied Irish Banks to pay its new chief a salary €133,000 above a Government-imposed pay cap.

AIB wants to appoint insider Colm Doherty as its managing director with a contract exceeding the half million euro limit on top bosses’ pay. Mr Doherty, the head of the bank’s capital markets division, is already earning €633,000.

Under the rules of a €3.5bn state prop-up for the bank Brian Lenihan insisted chief executives’ wages should be limited to €500,000.

Mr Lenihan said cabinet ministers agreed not to breach the wage cap despite the finance house’s request, but opposition parties said the bank felt it could do whatever it wanted.

“I can tell you the Government are not willing to break with the established guideline in this case,” Mr Lenihan said.

“That was may position, that was the position of the Government and that’s where the matter stands.”

Mr Lenihan said his department received a letter from the bank at around 7pm last night requesting that the pay cap rules be breached in this case.

Taoiseach Brian Cowen told the Dáil talks between the Department of Finance and the bank were ongoing.

He said it was important to allow the process to develop to find an arrangement that was consistent with the Government position.

But Fine Gael leader Enda Kenny hit out at the Government and asked why the matter had not been dealt with given the state’s 25% stake in the bank.

“This is one of the major institutions that was centrally involved in the debacle that we now find ourselves in, financially and economically,” he said.

“It says to the Government you have no moral authority, you have lost credibility, and you are losing integrity and we will do what we like.”

“Why has this matter not been dealt with decisively by Government giving the control that we have here? Why are we in a position where we don’t know what’s happening, the bank doesn’t know and the Government won’t say.”

Mr Kenny said it was possible someone in the Irish diaspora would be willing to take on the role for the €500,000 salary.

While appointed managing director it is understood Mr Doherty will assume the duties of chief executive as that position remains vacant.

Former AIB chief executive Eugene Sheehy stepped down last April.

Under the management shake-up chairman Dan O’Connor will also take on the role of executive chairman, continuing his salary of €390,000.

Joan Burton, Labour Party finance spokeswoman, said: “AIB’s determination to appoint an insider to the top position is a reflection of the fact that little has changed at the top in the banks.

“Despite the enormous damage to the economy and cost to the taxpayer they want to return to business as usual as quickly as possible.”

Independent Senator Shane Ross said he was shocked.

“Throughout this crisis the banks have scored victory after victory over the cabinet,” he said.

“The concept of culture change is a fiasco, it’s just not happening.”

http://breakingnews.ie/text/ireland/eymheygbidmh/

SLUSK

Taxipete29 wrote: »

Socialism would of been to nationalise the bank when the problems started. This is not socialism. Its protectionism of corporate croonies of FF.

We are too small a country to have one of the big 2 banks fail. Your precious market would of closed the whole country had AIB or BOI collapsed.

Competent people would have taken over. What the government has done now is to take money from the competent and given it to the incompetent. Here guys now you have money again and now you are free to compete against the competent with their money.

Mr.Micro

So AIB is not grateful to Lenihan for the massive bailout with tax payers money. Did he really or rather does he really think that the banks are going to toe the line now that NAMA exists? How naive the little man is. Imagine if the nation needed a bailout from the banks..... the mind boggles at the answer, or the conditions that would be exacted if they agreed. The banks will look after themselves and their shareholders like they always did and will laugh long and hard for years to come at how they were given billions for free as reward for bad and negligent investments and loans. Lenihan has no control over these sharks and he can pretend all he likes that he has power. There is no guarantee that a similar debacle could not happen again in one form or another as the likes of the AIB know that they will be bailed out forever.

kincsem

They have Lenihan on a leash.

Liam Byrne

Well after hearing this news I reckon I'll be down there this week to close a business account with them.....

old boy

kbannon wrote: »

Bertie, is that you?

no, just a little guy who who had to look after himself, being from the sticks i recognised the smell of schit, and went upwind of it, i am really glad i have not got a bank account, also if the people on here, plus their immediate familys who are constantly moaning about the banks do the same as i have, it would put manners in the b@stards in a reasonable amount of time.

bernardo mac

Saw the AIB ad. tonight which declares: " supporting clubs,supporting communities" .That's right :The Cosy Clubs of the Well Heeled Community

ifconfig

I followed the story a bit throughout the day.

Simon Carswell's article said "sources say" .. in relation to the renumeration and the proposed appointments in AIB.

At the time of going to press it says DoF sources would not comment.
Later we got the communication from Brian Lenihan insisting that the cap would not be breached in making any appointment.

So, is it clear that the leak regarding AIB's two-finger salute was made purposely by AIB in order to stir things up as a pre-emptive strike ?

This is the bit that gets me most. The audacity of the bank trying to present this as a done-deal and overstepping the authority of the minister.

Liam Byrne

It was on Vincent Browne a few minutes ago that there are, in fact, TWO issues.

1) Lenihan supposedly doesn't want this guy at the top
2) Lenihan says that he doesn't want the salary (despite not putting it into the required legislation)

So basically, if Lenihan "stands up to" the bank on the salary issue (which he wouldn't have to do if he'd written the legislation properly) the other issue sneaks under the counter and it looks like the incompetent has "done his job".