Legal status of AIB bonuses

murrayp4

Does this seem like a reasonable view of the current situation?

per. Fintan O'Toole today:
(i) It appears the bonuses were hurriedly brought forward by 2 months- it looks like this was done to pre-empt any state veto of the payments. By bringing the payments forward, they could have the bonus deals done before the state became involved in the bank
(ii) The bonuses appear to have been inflated as it was to be the last bonus paid in a long time
(iii) AIB offered no defence in the High court case
(vi) the bonuses relate to a period where AIB had traded recklessly

(iv) I would suggest the payments were ultra vires the directors powers- at the time as they knew or ought to have known that the bank was insolvent but they went ahead with the bonus deals regardless. see Parke v Daily News Ltd.

The company was insolvent at the time the decision to pay the monies was taken- it was an ultra vires act to pay or agree to pay the gratuities.
Any legal obligation to pay is therefore dissolved by the insolvency.

coylemj

murrayp4 wrote: »

The company was insolvent at the time the decision to pay the monies was taken- it was an ultra vires act to pay or agree to pay the gratuities.
Any legal obligation to pay is therefore dissolved by the insolvency.

By that logic they shouldn't be paying salaries to their employees because they're broke. Ultra Vires refers to an arm of the state doing something outside it's powers.

This is straightforward media witch hunt joined by the whingers in Labour and Inda Kenny. There are people in AIB who are doing the same job that they have always done and who are remunerated by way of performance-related bonuses, the same way that every salesman and saleswoman in the country is rewarded for achieving their targets. Just because some of their colleagues recklessly lent money to developers doesn't mean that every employee in AIB who helps it to make a profit shouldn't be rewarded for their efforts.

While a flat pay with no bonus might be the norm in the public sector, it most certainly is not in the private sector. As shareholders we (the ordinary citizens of the country) have a vested interest to see to it that the banks return to profitability as soon as possible. Demonising the process of rewarding high performers will chase the brightest talent out of the country to banks in London and Frankfurt and we will be left with the pen pushers meaning that the banks will take much longer to return to profitability and they will remain in public ownership for years.

JCB123

I feel very sorry for these AIB staff. They are basically little footballs being kicked about by the media & politicians to win votes or readers.

The infamous john foy bonus of 170k, if its cancelled effectively enforces a 70% pay cut! In any mans language thats harsh!! Whats worse is I'm sure the profit he actually generated for AIB was significantly more so surely logic would have it that canceling the bonus is just destroying a much needed future revenue stream for the Bank?

Really proves that the likes of Cowan, Gilmore, Fintan o'toole etc etc really couldn't give a toss about whats in the best interest of the country. They are just playing their own little game for their own interests. Or maybe they would actually prefer him to go off and make this money for some other foreign bank.

smellyanus

murrayp4 wrote: »

Does this seem like a reasonable view of the current situation?

per. Fintan O'Toole today:
(i) It appears the bonuses were hurriedly brought forward by 2 months- it looks like this was done to pre-empt any state veto of the payments. By bringing the payments forward, they could have the bonus deals done before the state became involved in the bank
(ii) The bonuses appear to have been inflated as it was to be the last bonus paid in a long time
(iii) AIB offered no defence in the High court case
(vi) the bonuses relate to a period where AIB had traded recklessly

(iv) I would suggest the payments were ultra vires the directors powers- at the time as they knew or ought to have known that the bank was insolvent but they went ahead with the bonus deals regardless. see Parke v Daily News Ltd.

The company was insolvent at the time the decision to pay the monies was taken- it was an ultra vires act to pay or agree to pay the gratuities.
Any legal obligation to pay is therefore dissolved by the insolvency.

Not really reasonable murray

(i) untrue
(ii) absolutely untrue
(iii) they had no defence to offer
(iv) It's only my opinion but I doubt the directors could have been aware in Feb '09 that the company was insolvent, after all it took the government until late this year to figure that out.
(vi) reckless trading is completely unconnected to this. The bonuses were to be paid to Capital Markets staff, absolutely nothing to do with mortgages, property developers etc. We are talking about a department that made something like €500m profit last year.

I read O 'Tooles article this morning.....he should probably get a more reliable source.
I can also say that all the press coverage of this topic conveniently diverts attention away from the budget and on top of that the media coverage was entirely innacurate.
Of the 2400 staff due to get the bonuses, very very few were these "senior executives" constantly referred to in the media.
In fact I can also state that the majority of these staff earn well below the national average wage.
Anyway rant over. I think it was Eamon Gilmore mentioned Buckley V AG 1950 this evening.
I am not well up on legal speak etc. Would anyone here have any knowledge about this case? I could only find a brief mention of it here on boards http://www.boards.ie/vbulletin/showthread.php?p=51238618
What would be your take on it?
Regards
Smelly :cool:

murrayp4

OK- ignoring the Fintan O'Toole article for the moment- I probably shouldn't have referred to it as it muddies the waters. Also I'm not suggesting that some staff are not morally entitled to the payment- I'm querying the legal enforceability of those payments.

My point being- as the decision to make discretionary payments (I'm only referring to those that were discretionary) was made at a point where the directors knew or ought to have known that the company was insolvent- these discretionary payments were ultra vires (a well know doctrine of company law)and therefore not legally enforceable- I'd refer again to the Parke decision.

macjohn

smellyanus wrote: »

. I think it was Eamon Gilmore mentioned Buckley V AG 1950 this evening.
I am not well up on legal speak etc. Would anyone here have any knowledge about this case? I could only find a brief mention of it here on boards http://www.boards.ie/vbulletin/showthread.php?p=51238618
What would be your take on it?
Regards
Smelly :cool:

Think Buckley was about seperation of powers and (in simple terms, someonelse might explain it better) that the Oireachtas cant interfere in an issue that is (has been?) being decided by the courts.

brian__foley

coylemj wrote: »

Ultra Vires refers to an arm of the state doing something outside it's powers.

In the context of this threat, that observation is beyond rubbish. Company law is law as well. Whether they were uv or not, I don't have a view on, but to dismiss the point by saying "its about the state doing something outside it's powers" is just to misunderstand basic, basic law.