Noonan to abstain on Boucher pay package

bmaxi

It was announced this morning that the Government, in the person of Michael Noonan, is to abstain from the vote on the c.€800,000 pay package of Richie Boucher, CEO of Bank of Ireland and on his re-election to the Board of Directors of the bank, in which the State has a 15% shareholding
Given that Government policy is , bank director's pay should capped at €500,000 and also that Boucher was in the thick of the madness that has brought us to the state we are in today, how can the Government say that the Irish taxpayer they are there to represent, has no opinion one way or the other on these matters? In my view the Irish taxpayer has very strong opinions on these matters. This is a cowardly and damaging decision by Noonan, no doubt Boucher's fellow travellers in the major financial institutions will carry the day in the sure knowledge that Boucher and his Board will reciprocate when their time comes.
Leadership, my arse.

kippy

bmaxi wrote: »

It was announced this morning that the Government, in the person of Michael Noonan, is to abstain from the vote on the c.€800,000 pay package of Richie Boucher, CEO of Bank of Ireland and on his re-election to the Board of Directors of the bank, in which the State has a 15% shareholding
Given that Government policy is , bank director's pay should capped at €500,000 and also that Boucher was in the thick of the madness that has brought us to the state we are in today, how can the Government say that the Irish taxpayer they are there to represent, has no opinion one way or the other on these matters? In my view the Irish taxpayer has very strong opinions on these matters. This is a cowardly and damaging decision by Noonan, no doubt Boucher's fellow travellers in the major financial institutions will carry the day in the sure knowledge that Boucher and his Board will reciprocate when their time comes.
Leadership, my arse.

This is what sickens me about the whole mess. Absolute double standards and the lack of leadership to at least make a stand on this.
I heard some commentator say that Boucher possibly "deserved" his salary as the other shareholders in the bank were happy enough with him, he had moved the share price from 11-18 cent or something like that - obviously forgetting everything else and the state should possibly keep those other shareholders happy as they "Saved" the state from having to invest any more money in the bank, also neglecting to mention that without the state guarantee the bank would be in the crapper now.

In fairness this government have broken their own pay caps on "advisors" so it'd be slightly hypocritical of them to tell others not to breach pay caps as well.

VinLieger

Whats ridiculous about this is even if he voted no Boucher would most likely still get the package so why not simply have a bit of cop on and vote against it to make the public happy? You know like.... actually be political?

Really is worrying they cant even figure that out

bmaxi

VinLieger wrote: »

Whats ridiculous about this is even if he voted no Boucher would most likely still get the package so why not simply have a bit of cop on and vote against it to make the public happy? You know like.... actually be political?

Really is worrying they cant even figure that out

Maybe there was a possibility the vote might be within 15%, we'll have to wait and see. Another possibility is that bank shares would have taken a hit if the State voted no, as this might be interpreted as a vote of no confidence in the CEO but what are they saying by abstaining? I'm sure I've heard Noonan make the case for Boucher before but that was a personal opinion, personally I think a stand has to be made somewhere against this cartel, their bluff has to be called.

PRAF

Agree with the other posters. I simply cannot see any possible benefit in not voting against Bouchers excessive pay.

ednwireland

dont see why FG wouldnt vote for breaking the cap for boucher. one of their first actions in gov was to break there own self imposed cap for advisors. they are just treating the electorate as saps imo

Chips Lovell

Govt is a minority shareholder, so to vote against it would amount to pointless grandstanding, since the big institutional shareholders don't care how much Boucher is paid and would pass it.

VinLieger

Vladimir Kurtains wrote: »

Govt is a minority shareholder, so to vote against it would amount to pointless grandstanding, since the big institutional shareholders don't care how much Boucher is paid and would pass it.

And what does abstaining do? At least voting against it would maybe win them a few "well done for doing the right" newspaper articles and they desperately need positive media coverage right now in this regard

Chips Lovell

Also, voting no would have opened them up (rightly) to charges of hypocrisy since they signed off on Boucher's package as part of the bank guarantee.

Going Forward

Obviously fearful that he might take it personally and reliquish the post and all its benefits.

Its so ironic, paying peanuts and getting monkeys etc.......

As mentioned, the public deserves a semblance of leadership and a voice on this for optics alone.

heybaby

Vladimir Kurtains wrote: »

Govt is a minority shareholder, so to vote against it would amount to pointless grandstanding, since the big institutional shareholders don't care how much Boucher is paid and would pass it.

Yes they have 15 % of the share and yes probably the motion would have passed if they had voted against it BUT, its the optics of the situation, they are all wrong. The fact that clearly couldnt be arsed even voting on this issue is appalling but not surprising given their spinelessness. FG have morphed into FF completely now but the signs were there from early on after they were elected. Their failure to burn the bondholders and their bend over and take it attitude to the banks they bailed out with public money proves that the old order is alive and well, the large institutional shareholders , the banks and the government will never play for opposing sides. The hypocrisy of Noonan et al is staggering but not surprising from a career politician who like many in the Dail is a millionaire who last walked amongst the ordinary men and women of this country decades ago.

Chips Lovell

The resolution on pay passed with 99.31 per cent of ballots cast.

The government had already signed off on Boucher's pay package as part of the bank guarantee. It would be kind of hypocritical now to go in and vote against it. And voting for it would have resulted in headlines too. Abstention was probably the least worse course of action.

You can't have it every which way. Boucher's salary is very low by international standards. The private investors they got on board want him there and are happy to pay him that much. Would you prefer if the govt retained control of BoI and paid its boss less instead?

Going Forward

How does his performance compare by international standards, are you comparing his pay others in bailout countries?

Was he not there when the bank was being mismanaged?


It looks to me of NAMA developers getting up to 200k PA and a nice lifestyle after screwing up.

Chips Lovell

If we wanted to control who runs BoI and how much they're paid, then we should have taken it under state control. But nobody wants another bank in state ownership for the sake of paying it's CEO way below the going rate. Fact of the matter is that the private investors who control the bank are happy with Boucher and happy with how much he's paid.

bmaxi

Vladimir Kurtains wrote: »

If we wanted to control who runs BoI and how much they're paid, then we should have taken it under state control. But nobody wants another bank in state ownership for the sake of paying it's CEO way below the going rate. Fact of the matter is that the private investors who control the bank are happy with Boucher and happy with how much he's paid.

Really it's nothing to do with how much Boucher is paid, exorbitant though it is. These Bankers will always find a way of justifying their salaries because, in the majority of cases, where financial institutions invest in each other, they are preaching to the converted.
Our Government, representing us, at least that's what I'm told, had an opportunity to voice the public's disapproval of Boucher and his ilk and chose not to have an opinion, I don't believe that reflects what the public think. The Bank guarantee if we're to believe our politicians, was unavoidable, it doesn't mean we have to like it or that the public at large support it. My guess is the public would gladly have let them swing and lived with the consequences.

Banjo String

Michael OLeary runs Europes biggest airline, Ryanair.

Last year Ryanair made a profit of about €500 million. OLeary gets a salary of €768,000.

Richie Boucher runs a tiny European bank, Bank of Ireland, on a small island, it made a loss of €2 billion last year, yet Boucher gets a salary of €843,000.

WTF ?

Chips Lovell

O'Leary earned €1.2 million last year if you include bonuses.

Boucher's basic pay is €690,000, excluding bonus.

As this Business Post piece reports, that's very low by international standards.

In the United States, the median total compensation for a chief executive of a mid-cap bank in 2011 was $3.6 million (€2.8 million), according to a survey of pay strategies for S&P 400 companies carried out by Equilar, an executive compensation data firm. According to Equilar, financial services was also the lowest-paid sector for chief executives among all mid-sized companies, with an average market capitalisation of about €2 billion - about the same size as Bank of Ireland. Cash salary accounted for half of total compensation - or €1.4 million - with share options and other benefits making up the rest. So base-pay among top American bankers at institutions comparable to those in Ireland was nearly three times what the government here would allow.

"You can empathise with the people for being angry at bankers' pay," said Richard Eardley, managing director at recruitment firm Hays Ireland. "The problem is €500,000 looks like a phenomenal amount to earn, but in the context of international banking, it's not."

Banjo String

Vladimir Kurtains wrote: »

O'Leary earned €1.2 million last year if you include bonuses.

Boucher's basic pay is €690,000, excluding bonus.

As this Business Post piece reports, that's very low by international standards.

Very high for a company that is losing billions, year in year out though.

:cool:

Chips Lovell

Well they actually turned a profit in 2011, but they were back in loss making territory last year.

The point is that a.) his salary is pretty low by international standards and b.) the vast majority of the bank's shareholders want him in charge.

The government couldn't have blocked his compensation because it only has a 15 per cent stake. It could have refused to endorse it as part of the bank guarantee last year, but what good would that have done only to create problems with the very people who stepped in to avoid the state having to take a majority stake in the bank.

The goal here is to get out of the banking sector by trying to get our money back by divesting ourselves of involvement in the banks, not grandstanding over banker's pay.

bmaxi

Vladimir Kurtains wrote: »

O'Leary earned €1.2 million last year if you include bonuses.

Boucher's basic pay is €690,000, excluding bonus.

As this Business Post piece reports, that's very low by international standards.

That doesn't negate Sam Hall's point. I fail to understand the rationale of comparing Boucher's pay with the pay of, say a bank president in the U.S. which controls perhaps hundred of billions of dollars and is profit making.
You'll note our government are not so quick to make comparison between their pay rates and politicians in the U.S., wonder why that is.

Chips Lovell

bmaxi wrote: »

I fail to understand the rationale of comparing Boucher's pay with the pay of, say a bank president in the U.S. which controls perhaps hundred of billions of dollars and is profit making.

It was a comparison between US banks of the same size as Bank of Ireland.

So base-pay among top American bankers at institutions comparable to those in Ireland was nearly three times what the government here would allow.

kippy

Vladimir Kurtains wrote: »

It was a comparison between US banks of the same size as Bank of Ireland.

The size of what?
Staff numbers, deposits, loan book, non-performing loans, share price, depositors, market share?

kippy

Vladimir Kurtains wrote: »

Well they actually turned a profit in 2011, but they were back in loss making territory last year.

The point is that a.) his salary is pretty low by international standards and b.) the vast majority of the bank's shareholders want him in charge.

The government couldn't have blocked his compensation because it only has a 15 per cent stake. It could have refused to endorse it as part of the bank guarantee last year, but what good would that have done only to create problems with the very people who stepped in to avoid the state having to take a majority stake in the bank.

The goal here is to get out of the banking sector by trying to get our money back by divesting ourselves of involvement in the banks, not grandstanding over banker's pay.

Is that really the goal? Or is it just part of it?
There's not much point in getting our money back if we end up repeating the mistakes of the past.

bmaxi

Listening to SE Radio this morning I heard FG Senator and former TD for Wexford, Michael D'Arcy, express his disapproval of the Government's stance on the Boucher affair, disgruntlement in the camp it appears.
If it wasn't enough that Government had no opinion on Boucher, it appears they also have no opinion on AIB's decision to increase variable interest rates on mortgages, they can hardly claim not to have an input here. If it wasn't obvious before, it has to be now, just where FG's priorities lie.

Banjo String

bmaxi wrote: »

Listening to SE Radio this morning I heard FG Senator and former TD for Wexford, Michael D'Arcy, express his disapproval of the Government's stance on the Boucher affair, disgruntlement in the camp it appears.
If it wasn't enough that Government had no opinion on Boucher, it appears they also have no opinion on AIB's decision to increase variable interest rates on mortgages, they can hardly claim not to have an input here. If it wasn't obvious before, it has to be now, just where FG's priorities lie.

It's hard to fathom when E.K can stand over serious cuts to front line workers slaries, such as Gards, Teachers, and nurses etc, yet seemingly unwilling to touch (or have an opinion) on Bankers salaries.

Correct me if I'm wrong, but the Gards, Teachers, Nurses, and the rest of the front line PS staff weren't at the helm when the economy went off the cliff.

I find it almost unbelievable the constant defense offered to the goivt and bankers on these threads at times.

bmaxi

SamHall wrote: »

It's hard to fathom when E.K can stand over serious cuts to front line workers slaries, such as Gards, Teachers, and nurses etc, yet seemingly unwilling to touch (or have an opinion) on Bankers salaries.

Correct me if I'm wrong, but the Gards, Teachers, Nurses, and the rest of the front line PS staff weren't at the helm when the economy went off the cliff.

I find it almost unbelievable the constant defense offered to the goivt and bankers on these threads at times.

Nor were the frontline bank staff, yet Government can butt in there to seek a further 6-10% cut in their pay. The hypocrisy is beyond belief, Staff at IBRC have been told that redundancy terms negotiated last year will not be honoured but Government can't interfere in the contracts of bank executives. Someone please tell us where the guns are buried.

hfallada

It's €800,000. If he manages to turn the bank around a get a return on shares that the tax payer owns he is a bargain. If you go with who ever is the cheapest it maybe false economy.

Let the shareholders deceide his pay. The Irish tax payer only owns 15%

bmaxi

hfallada wrote: »

It's €800,000. If he manages to turn the bank around a get a return on shares that the tax payer owns he is a bargain. If you go with who ever is the cheapest it maybe false economy.

Let the shareholders deceide his pay. The Irish tax payer only owns 15%

Read the thread title and perhaps the rest of the thread.

Chips Lovell

bmaxi wrote: »

... it appears they also have no opinion on AIB's decision to increase variable interest rates on mortgages, they can hardly claim not to have an input here. If it wasn't obvious before, it has to be now, just where FG's priorities lie.

Perhaps the government should give more cash to AIB so that it can keep its interest rates down? Is that what you want? The bank needs to start generating more revenue if it's going to have any hope of getting off state life support.

bmaxi

Vladimir Kurtains wrote: »

Perhaps the government should give more cash to AIB so that it can keep its interest rates down? Is that what you want? The bank needs to start generating more revenue if it's going to have any hope of getting off state life support.

There are few of us who are privy to what AIB can do and are not doing to keep it's interest rates down but obviously asking for a contribution from it's executive cadre is not included in the business plan. AIB should have been allowed to sink, how many billion more than estimated have they cost the taxpayer due to "creative accounting", since the bank guarantee. It's widely expected that the ECB will cut the base rate next week so that will help and I'm pretty sure AIB are aware of that too but instead of allowing mortgage holders to benefit, they've chosen this path. How many more mortgage defaults will this trigger, which will result in more losses and more taxpayer subvention anyway? It's a vicious circle.

What I am talking about and what the whole thread has been about, is the double standards practised by the Government in these situations. Have we sunk so deeply into the capitalist mire that we've forgotten the human element?

Son Of A Vidic

Vladimir Kurtains wrote: »

You can't have it every which way. Boucher's salary is very low by international standards.

I love this international standards business. This is the very industry after all, where reckless risk taking, managerial incompetence and general stupidity launched a global financial meltdown. Where else do you find a 'profession', where clowns continue to get bonuses and perks regardless of their poor performance. The sooner these guys face serious consequences for their ineptitude, the sooner the taxpayer might be protected from a repeat performance.