Fianna Fáil Finance Spokesperson Michael McGrath TD has called on the Minister for Finance Michael Noonan to clarify if his department has found that it was supplied inaccurate information or was misled by Anglo Irish Bank in relation to the amount of money paid out in bonuses at the bank in 2010.
 
Deputy McGrath said: ‘Minister Noonan informed me six weeks ago by way of a parliamentary reply that he was seeking an urgent report from Anglo Irish Bank and an explanation from Anglo as to why it did not provide certain information on bonuses at the bank to the previous Minister for Finance, Brian Lenihan, in December last year.  
 
On June 30th last, in reply to a question from Deputy McGrath about bonuses at the nationalised bank, Minister Noonan said “I am concerned that the information just supplied to my Department by Anglo Irish Bank in answer to this question does not accord with material provided to my predecessor for previous Parliamentary Questions, most recently on 16th December last……….In light of the discrepancy in the information that my Department has just received, I have requested an urgent report from the bank, which will provide full and accurate information and an explanation of why this was not forthcoming in December 2010.  I will advise the Deputy further when this report is received and assessed by my Department.”
 
On July 21st, Minister Noonan advised Deputy McGrath in reply to a further parliamentary question, “A draft report has been received from Anglo Irish on the matter as requested which is currently being examined within my Department.” However, the Minister has made no further comment since.
 
Commenting on the issue, Deputy McGrath said, ‘The suggestion that inaccurate or misleading information about bonuses at Anglo Irish Bank may have been supplied to the former Finance Minister Brian Lenihan last December is a cause of grave concern. My understanding is that the figures supplied to Minister Noonan for bonuses paid in 2010 differ from the information supplied by the bank to his predecessor last December. This matter needs to be urgently clarified. If it turns out to be the case, it is not acceptable that inaccurate or misleading information was supplied by a State owned bank to the Minister for Finance of the day to assist him in answering parliamentary questions.
 
‘This is a most serious matter, and requires urgent attention by the Minister. I am calling on Minister Noonan to publish the report which has been received from Anglo Irish Bank; to provide specific details of the discrepancy in the bonus payment information he referred to on 30th June 2011 in response to my parliamentary question and what further action his Department intends to take.’

 

Below is the Parliamentary Questions relating to this issue, including the questions from Deputy McGrath answered on 21 July 2011; 30 June 2011 and a question from Deputy Joan Burton on 16 December 2010.

 

DÁIL QUESTION

NO  92

To ask the Minister for Finance further to Parliamentary Question No. 92 of 30 June 2011, if the report he has requested from Anglo Irish Bank has been supplied to him; and if he will make a statement on the matter.

 

– Michael McGrath.

*    For WRITTEN answer on Thursday, 21st July, 2011.

Ref No: 22129/11

 

REPLY

Minister for Finance (Mr Noonan):            A draft report has been received from Anglo Irish on the matter as requested which is currently being examined within my Department.

 

DÁIL QUESTION

NO  92

To ask the Minister for Finance if any bonus payments have been paid to the Chief Executive of any of the management team at Anglo Irish Bank in respect of the 2010 calendar year; if so, if he will provide the relevant details; and if he will make a statement on the matter.

 

– Michael McGrath.

*    For WRITTEN answer on Thursday, 30th June, 2011.

Ref No: 18166/11

 

REPLY

Minister for Finance (Mr Noonan):            My Department has been advised by the bank that no discretionary bonus payments were paid to the Chief Executive or any of his management team, at the bank in respect of the 2010 calendar year.  The bank has advised that it does not operate any performance- related bonus scheme.

I am concerned that the information just supplied to my Department by Anglo Irish Bank in answer to this question does not accord with material provided to my predecessor for previous Parliamentary Questions, most recently on 16th December last. 

I am making further enquiries so I am in a position to provide the fullest possible information to the House. 

As the Deputy may be aware, I have asked the NTMA to conduct on my behalf a review of remuneration policies and practices by the covered institutions. This review is intended to encompass all aspects of compensation and is not limited to salary. This would include non-salary items such as annual discretionary bonus, guaranteed bonus, contractual bonus, cash long term incentives, deferred bonus and retention payments. This review exercise is ongoing.

In light of the discrepancy in the information that my Department has just received, I have requested an urgent report from the bank, which will provide full and accurate information and an explanation of why this was not forthcoming in December 2010.  I will advise the Deputy further when this report is received and assessed by my Department.

 

DÁIL QUESTION

NO  156

To ask the Minister for Finance in respect of bonuses paid after September 2008 by credit institutions covered by the bank guarantee, the number of staff at each of the institutions who have received bonuses for the years 2008, 2009 and 2010; the sums of money that have been paid by each institution by way of bonuses in each of the years 2008, 2009 and 2010; and if he will make a statement on the matter.

 

– Joan Burton.

 

*    For WRITTEN answer on Thursday, 16th December, 2010.

Ref No: 47995/10

 

REPLY

Minister for Finance (Mr Lenihan):            The Deputy will be aware that since the introduction of the Government Guarantee Scheme in September 2008 there have been a number of Government backed initiatives which impact on the operational environment and place specific restrictions and limitations on the covered institutions in relation to the payment of bonuses to their senior management and staff. I refer to the publication of the CIROC report and the subscription agreements for the recapitalisation of Bank of Ireland and AIB, the nationalisation of Anglo Irish Bank, and the later capital injections by Government in support of the EBS and INBS.

I would point out to the Deputy that the covered institutions operate in an arms length capacity in relation to operational issues.  It is a matter for the respective individual boards and senior management to determine and implement pay policy in their organisations subject to their relevant operating environment.

From enquiries made, I am informed by the respective institutions that the position regarding the issues raised by the Deputy in relation to their organisation is as laid out in the appendix following. I am still awaiting a reply from Bank of Ireland which I will forward on to the Deputy as soon as I receive it.

 

Appendix

 

Year that bonuses were paid

Bank

No of staff paid

Total amount of bonuses paid

After Sept 2008

BOI

 

 

 

AIB

681

€1.3m

 

Anglo Irish

1,594

€20,771,353

 

EBS

Nil

Nil

 

INBS

318

€1,448,000

 

IL&P

13

€11,834

 

 

 

 

2009

BOI

 

 

 

AIB

1,387

€19.3m

 

Anglo Irish

10

€396,603

 

EBS

35

€145,600

 

INBS

2

€12,300

 

IL&P

509

€745,680

 

 

 

 

2010

BOI

 

 

 

AIB

Nil

Nil

 

Anglo Irish

5

€273,787

 

EBS

69

€326,006

 

INBS

1

€9,000

 

IL&P

103

€46,891

 

 

 

 

 

AIB

Of the €19.3m paid in 2009, €18.3m was paid to overseas staff. The remainder represents payments to 750 staff in areas such as contact centres.

 

Anglo Irish Bank

Anglo Irish Bank have ceased to award bonuses since 2009. Bonus payments reported in the table above refer to bonuses paid that were awarded prior to 2009.

The payment amounts set out in the 2008 section of the above table are in respect of bonuses earned prior to that period. There were ten bonus awards paid during 2009. The breakdown was as follows: nine were contractual entitlements to a deferred portion of a bonus earned in previous years and one was a performance related bonus in respect of year 2008 but implemented for payment in 2009.

There were five bonus awards paid during 2010. All of these awards were contractual entitlements to a deferred portion of a bonus earned in previous years. There were no performance related bonuses awarded during 2010.

 

Educational Building Society

No management or general bonuses have been paid in EBS Group since 2008 with the exception of two cases set out below which relate to a contractual remuneration structure in one case and a once off retention payment in the other case.

In January 2009, as part of their normal contractual remuneration structure, 35 employees in staff grades in EBS’ Direct Call Centre received bonuses averaging €4,160 per employee. In January 2010 the same category of 43 staff grade employees received an average bonus of €2,442.

Exceptionally in January 2010 as part of a once off contractual retention scheme, 26 employees in the EBS Broker business subsidiary, Haven Mortgages Ltd., received lump sum retention payments averaging €8,500 per employee.

 

Irish Nationwide Building Society

INBS advise that in November 2008, the former Chief Executive of the Society received a bonus of €1m from the Society.  As set out in the INBS 2008 annual report and accounts, this comprised part of his overall remuneration of €2.313m in 2008 which also included €450,000 described as “other payments” in the report. 

The Society further advises that, apart from the payments to the former Chief Executive in 2008, payments totalling €378,000 were paid to 314 staff in December 2008 in line with similar payments made at Christmas in preceding years.  This payment was not made in either 2009 or 2010 and has now been discontinued.  In addition, performance related bonuses totalling €70,000 were paid to three staff in 2008.  Two staff received payments totalling €12,300 in 2009, one of which was a contractual payment and the other an ex-gratia payment.  One member of staff received a contractual payment of €9,000 in 2010, but which will no longer apply in the future.

 

Irish Life and Permanent

The breakdown in the level of staff receiving bonuses is as follows: Specialist / Professional and Clerical staff received bonuses in respect of the three years 2008, 2009 and 2010. Executive and Senior Management received bonuses in 2009 only and included with other staff levels in the table above. Junior Management received bonus payments for 2009 and 2010.

The number of payments which is the number reported as number of staff paid in the table may differ from the actual number of staff paid , as some staff members may have received more than one payment in the year.