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Banker bonuses

Five Anglo Irish staff were awarded bonuses in 2010

AIB senior bankers not the only happy ‘key staff’ renumerated this year…

AIB’s SENIOR EMPLOYEES are not the only happy bank employees in the land. It was confirmed today that €40m worth of bonuses awarded for the year 2008 will be paid to AIB bankers this Christmas.

The news comes a day after Finance Minister Brian Lenihan said that “there’ll be no bonuses paid to bankers until these banks start making profits and start returning money to us again”.

However, these 2,400 AIB ‘key staff’ are not alone in continuing to reap rewards since the banking system imploded in 2008:

Staff in Anglo Irish Bank were given a general salary increase of approximately 5 per cent, up to managerial level in 2009.

Ten individuals in Anglo Irish Bank received “bonus awards” in 2009.

Five bonus awards were paid out to Anglo Irish Bank employees in 2010, although these are described as “contractual entitlements to a deferred portion of a bonus earned in previous years”.

In AIB, a total of €58.7m of bonuses were paid to staff in 2009 and 2010. Of this figure, €56.3m “relates to performance-related bonuses to staff in AIB Capital Markets” which were awarded in previous years but deferred and paid in the 2009 and 2010 period. The balance, €2.4m, was paid to staff in AIB’s offices in Jersey and the Isle of Man and also included payments “in respect of a small number of pre-existing contractual bonuses”.

Bank of Ireland says it has not granted general pay increases in 2009 and 2010, nor were any performance-related bonuses paid to staff “with respect to the financial years to March 2009 and December 2009″.

These figures came from an answer provided to Fianna Fail backbencher Chris Andrews last week when he posed a question in the Dail about bankers’ bonuses. Today he said he backed Fine Gael TD James Reilly’s call for a tax of 99 per cent to be placed on all bankers’ bonuses, or that the bonuses to be paid in bank shares that would be redeemable in five years.

Mr Andrews told that he believed the awarding of bonuses to both AIB and Anglo Irish staff to be “unbelievable”:

I would ask the boards of these institutions to immediately clarify these figures for the Irish taxpayer who is paying for this. This Irish State essentially owns these institutions and reform has to happen across all levels.

He insisted he had demanded that the 99 per cent tax be included in the Budget at the Fianna Fail parliamentary meeting.

A Central Bank review of bank pay practices last month found that at least five Irish financial institutions who they reviewed had not done enough to reform how they pay and reward their senior staff. A speech by Assistant Director General Jonathan McMahon of the Financial Institutions Supervision in late October said that on the issue of renumeration:

While all banks have started to address this issue, the balance of our findings is discouraging, with only one institution having taken an obvious lead in reforming its practices.

Read his speech here>

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