BANK OF IRELAND has paid staff €66 million in bonuses since the introduction of the bank guarantee – and plans to spend a further €21 million on bonuses and commission payments in the coming year.

The figures were disclosed in a Department of Finance report after an investigation was launched to examine bonus payments made by the bank since September 2008. While the bank had repeatedly insisted that no performance-related bonuses had been paid to senior management during this period, the report found that:

• Senior executives in Bank of Ireland were paid previously contracted bonuses amounting to €4.3 million during that time
• BoI is due to pay contractual bonuses of €0.6 million to senior executive team members in 2011 and a further €0.2 million in 2012
• The Bank has advised that payments of up to €11 million – for up to 250 staff – may be payable in 2011 under certain bonuses categories

The report, conducted by the Arthur Cox legal firm at the Minister for Finance’s request, found that the €66 million spent on bonuses was broken down as follows:

• €0.979 million – spent on discretionary bonus payments. These include payments made in businesses which have been closed down, sold or are for sale/wind down
• €30.792 million – spent on a range of contractual payments (guaranteed bonuses, contractual guarantees, Cash LTIP’s and deferred bonuses)
• €11.359 million – spent on retention payments
• €23.244 million – spent on commission type payments

The report confirms that misleading information was provided to the department by the bank – and that this information was subsequently relied upon by the Minister for Finance in his replies to Dáil questions about bank bonuses.

Both the department and the Minister for Finance have said they are “dissatisfied” with the bank’s approach to the question of bonuses, saying that the report had unveiled a “catalogue of errors”.

It also stated that BoI’s definition of what exactly constituted a performance related bonus is “at odds” with a normal interpretation. The department said that “such restrictive and uncommon interpretations are misleading and are inappropriate from a bank in receipt of taxpayer support.”

Bank of Ireland will be forced to pay €2 million to the exchequer for providing misleading information to the minister.

Read the full report on payment of bonuses in Bank of Ireland >