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".

donkey balls

Liam Byrne wrote: »

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".

and him working as a snr counsel FFS you think that a bit of legistslation would be bomb proof that he brings in to stop them(banks legal teams) from getting around it.

Liam Byrne

donkey balls wrote: »

and him working as a snr counsel FFS you think that a bit of legistslation would be bomb proof that he brings in to stop them(banks legal teams) from getting around it.

Sure that angle isn't even IN the legislation.......it's not that he didn't do it properly.....he didn't have any interest in doing it before signing away our money.

Then again, it's the same idiot that didn't bother his arse reading the Anglo report before throwing away more of our money.

With this FF Government, wanting to do the right thing and failing would actually be an improvement.......they've no interest in doing the right thing by the public whatsoever..... :mad:

donkey balls

agree 100% liam when it came out in the media that he did not read the report on the anglo deal, first thing i said to my mates was i hope i never have someone like him representing me in court and he doesent bother reading the witness/evidence statements.

by jaysus lenihan is in my catchment area regarding the voting he will never get a vote of me or his cronies.

ei.sdraob

AIB to back down over chief's €633,000 salary

Liam Byrne

ei.sdraob wrote: »

AIB to back down over chief's €633,000 salary

.....but not on WHO!!

A spokesman for Mr Lenihan said he had no option but to accept an internal candidate.

And in relation to my earlier post......

The bank was on a collision course with Mr Lenihan over its plans to appoint one of its own senior executives, Colm Doherty, as its managing director, on a salary of €633,000.

But Mr Lenihan hit back, saying the Government was "not willing to break with the established guideline" on pay limits.

There was speculation in banking circles last night that the standoff amounted to little more than a 'phoney war' destined to end in victory for Mr Lenihan.

Wow! I'm getting better at seeing Irish politics for what it is!

Wish I was wrong, though :mad:

monkeypants

kbannon wrote: »

old boy wrote: »

i do not have a bank account

Bertie, is that you?

Well spotted!

ardmacha

There was speculation in banking circles last night that the standoff amounted to little more than a 'phoney war' destined to end in victory for Mr Lenihan.

This seems quite likely. "We've reduced the bankers, so now all of you PS people take your medicine", although most of the PS people earn less than the reduction taken by the banker

meditraitor

What I find to be a bit troubling is that the Cap on wages was introduced with big fanfair and its only now that we realise that it was all smoke and mirrors.

The €500,000 cap only relates to one job, what a con job the government/bankers are pulling

The guy who AIB wanted to promote is on €633,000 so why was he not reduced to below €500,000 ages ago?
These gangsters are living in our pocket folks.

bernardo mac

Liam Byrne wrote: »

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.

Indeed you could be right Liam!:cool:

jdivision

Just been announced he'll take the job for 500k

Dannyboy83

jdivision wrote: »

Just been announced he'll take the job for 500k

With an end of year bonus of 250k I bet;)

meditraitor

They probably topped up his pension to cover the €133k loss in wages,

If my skepticism is proved wrong then fair play to the guy, tough job in a notorious bank

Tipp Man

meditraitor wrote: »

What I find to be a bit troubling is that the Cap on wages was introduced with big fanfair and its only now that we realise that it was all smoke and mirrors.

The €500,000 cap only relates to one job, what a con job the government/bankers are pulling

The guy who AIB wanted to promote is on €633,000 so why was he not reduced to below €500,000 ages ago?
These gangsters are living in our pocket folks.

Perhaps he deserves to earn 633k or whatever it is??

Personally i don't see what all the fuss is over, its not like they wanted to pay him 2-3m

meditraitor

Tipp Man wrote: »

Perhaps he deserves to earn 633k or whatever it is??

You forgot the

InReality

It also shows how the "sure its only the name on the door" line about nationalisation was such a great piece of spin.

Neilor

I used to think bankers were the dumbest people you would ever run into... the whole credit crunch seemed to confirm that the idiots didn't know what they were doing and were basically incompetent. However now that I see that the king rat can earn €10,000 A WEEK... they must be geniuses on the scale of an Einstein !!! I mean they couldn't possibly be moraly vacant theiving asses that would sell their mothers, wives and children to get a buck ? Could they ??

drBill

Bottom line is that the battle has been lost. Quelle surprise! Him and his buddies will find some other way to get the money and 130K is not a very significant amount of money in the circumstances. More important is the fact that they have ignored the instruction to fill the post externally, but this has been overlooked in the fog. So they've gotten their way as always. Now it'll just be back to business as usual for them, i.e. extract as much money as possible from the rest of us in any way possible.
From their perspective, and ignoring any moral qualms, why would they change a winning formula?

Linoge

drBill wrote: »

Him and his buddies will find some other way to get the money and 130K is not a very significant amount of money in the circumstances. More important is the fact that they have ignored the instruction to fill the post externally, but this has been overlooked in the fog.

I agree completely. In most big corporations most of the remuneration is performance based and received by way of stock or bonuses. Is this €500,000 cap air tight and inclusive of everything? In some cases the CEO takes zero by way of "salary" and the rest is received by way of stock and bonus. This ridiculous cap, which is too low by global standards, has done its job of keeping the same management structure as before.

This debacle was "unforeseen"??? It is so blatant it is an insult, how was such a low wage ever going to attract a world class leader? Would it have been such a stretch to cap the salaries of all existing directors, then the usual remuneration for an outside person coming in. I mean logically, why should an outside person take a salary cut because the pigs that were there before him made such a mess?? Who would want to take on such a task as overhauling a bank and be paid less than the market rate? I really can't get my head around such logic. These people are professionals, not aid workers.

markpb

Linoge wrote: »

how was such a low wage ever going to attract a world class leader?

I'd question the value of a world class leader in a small Irish bank. If AIB was an international bank with no branch network in Ireland and no involvement with Irish SMEs, they'd definitely need a world class leader. They're not - they're a national bank with aspirations and everytime they get it wrong, they expose the Irish taxpayer to their mistakes. They should be one or the other but not both - they're of systemic importance to our economy.

Daithinski

drBill wrote: »

Bottom line is that the battle has been lost. Quelle surprise! Him and his buddies will find some other way to get the money ...

+1 on this he'll just get the equivalent tacked onto to a bonus/pension payment.

I think the only thing the government and AIB had to figure out was how to sell it to the public.

Like the way AIB planned to pay their employees controversial bonuses on the sly. When they first went to pay the bonuses, they told the employees a week in advance when they were going to pay the bonuses, and told them not to tell anyone, but within hours the press got wind of it and the bonus payments were "cancelled" (in reality they were only postponed) .


So to get around this problem AIB played a bit dumb with their employees, by promising staff they would get a bonus but playing dumb as to when, the plan was/is to put the bonuses into the employees bank accounts with no advance warning so the press wouldn't get wind of it and scupper it again.