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AIB Bonuses

AIB bonuses blocked by Minister for Finance

Brian Lenihan threatens to pull all future funding marked for AIB if €40m bonuses are paid.

ALLIED IRISH BANK has said that it will not pay out controversial bonuses to staff following the intervention of the Minister for Finance, it has been revealed.

The Guardian reports that, last night, Brian Lenihan wrote to AIB to say that he would override the recent High Court ruling and legislate that any further cash-injections to AIB would be on the condition of  “the non-payment of any bonuses awarded, no matter when they may have been paid”.

The bonuses were due to be paid this Friday, following a High Court ruling in the case of John Foy, who brought the bank to court seeking a deferred €161,000 bonus from 2008. The case set a precedent that allowed for other AIB staff to claim deferred bonuses.

RTÉ reports that AIB reiterated tonight that it had received legal advice that it was obliged to pay the bonuses, however the bank added that  Lenihan’s intervention overtook that obligation. AIB released a statement to say that it “very much appreciates the support it has received to date from the State and the Irish taxpayers and acknowledges that it will continue to rely on this support for some time to come.”

The Guardian quotes David Hodgkinson, executive chairman of AIB, as saying:

The board of AIB very much welcomes the actions of the minister and is relieved to be in a position not to pay these bonuses.

We are determined to position the bank to play a full role in the recovery and development of the Irish economy. In doing so, we are committed to treating our customers, staff, the taxpayer and the public in a fair and transparent manner.