Bailed-out AIB to pay top staff €40m bonus

[Complainer]

Why would you want to?

I don't think you want to change that rule - you want to make sure that rule happens...

Sorry, you're right - I misread it.

My guess is this money has already been taxed in 2008 with the remainder held in some sort of escrow until now. It's the staff's money just held in some company account away from them. Might well even have showed up on their P60s.

Seems unlikely - why would it have been held in escrow?

 

[Black Sheep]

Has anyone made any attempts to tell us who is receiving these bonuses and for what exactly. Bonuses are normally paid for "extra" work above and beyond the call of duty, and the target related ones as per contract. Perhaps if we had a clearer idea why theses bonuses were paid. So far only assumptions are being made.
Front line staff (who had no part in all this) are bearing the anger and ridicule of the public.
I too, am very angry about this and cannot understand why legislation cannot be brought in immediately to tax it to the hilt as it is not yet paid out

 

[kdoc]

Has anyone made any attempts to tell us who is receiving these bonuses and for what exactly. Bonuses are normally paid for "extra" work above and beyond the call of duty, and the target related ones as per contract. Perhaps if we had a clearer idea why theses bonuses were paid. So far only assumptions are being made.
Front line staff (who had no part in all this) are bearing the anger and ridicule of the public.
I too, am very angry about this and cannot understand why legislation cannot be brought in immediately to tax it to the hilt as it is not yet paid out

Black Sheep you can't understand it because like most people you inhabit the real world. These bankers live in a parallel universe with a highly unusual culture and code of ethics that is at variance with the norms of a civil society.

 

[putsch]

Surely any bonus "contractual" or otherwise is based on achievement of targets - these MUST include overall profitability of the institution (please tell me this is so).

In that case how on earth can a bankrupt institution be liable to pay bonuses - AIB was bankrupt even in 2008 if the figures were done honestly.

 

[ontour]

From what I have understood these bonus' only relate to the Capital Markets division and were based on the improvement in performance of that division. The main problem is that people assume that a bonus means that someone is getting loads of extra money for doing nothing. Some jobs have a lower base salary and a greater portion based on the individual / group/ organisation performance. There are probably lots of other bank staff that got massive base salaries in 2008 but because it did not come under the classification of a 'bonus' there is not the same issue.

I would be delighted if politicians were paid bonus' based on performance. The could set out their goals at an election. If elected they would receive a low base salary and bonus' based on their ability to implement their proposed policies in the timeframe committed.

 

[Latrade]

Public sector employers do not bully their staff, even if their staff are attempting to bully them.

Please tell me you said this with tongue firmly in cheek. Do the unions really want to go down the path of state intervention in contracts of employment due to public opinion being misinformed by the media? Of all those who I thought might some understanding that this isn't a blatant as "greedy bankers" as the media portray, it's the PS workers. But I suppose we're only supposed to see through media agendas when it's maligning them.

It is very simple: the payment covers a period before the whole collapse. It is based upon all the employees meeting/exceeding their income targets. €40m is tiny in comparisson to the money they brought in. Many businesses have an overall company performance "bonus" as well as individual/unit based "bonuses" where those units/employees generate income. A company can still have a bad year in other areas, but that unit/individual can meet their targets, they are contractually obliged to that payment, it has nothing to do with overall performance of the company.

Minimum wage changes aren't retroactive, JSAs and other outdated agreements are still applied even in the most horrendous trading conditions (ask Mr Devoy about that one), there's just too much irony comming from the left on this.

I also see how the IBOA in calling for these bonuses to be deferred seem to be forgetting that their members are still enjoying increments and pay rises etc. I obviously missed the call for these to be deferred.

They're also lying when they say none of their members are affected by this. As pointed out early, there's a lot iof 'umble 'onest-to-god workers who will also be getting this payment who are members of the union.

 

[Smart_Saver]

According to previous posts this bonus affects up to 2400 people in AIB. Now if all these people are making money for AIB - i.e. making wise investements on stock market etc and bringing in whatever e.g. 3 times their targets then fair enough. However is it not the csae that a lot of these people may also have been lenders that lent to homeowners at up to 5-7 times their income and invested in business cases that may not have been stress tested properly. Of course it is possible/probable that this was the direction that was handed down from Senior management. But does that justify that the bonus should be paid, if the loan/investment to make that bonus possible is seriously underperforming now ?

 

[ontour]

However is it not the csae that a lot of these people may also have been lenders that lent to homeowners at up to 5-7 times their income....

No, it is the Capital Markets division that the bonus applies to. They do not provide home loans.

The bank should plead inability to pay or provide share instead of cash due to their current financial position.

 

[Shawady]

Apparently the bank did not even contest the court case, which I assume means the court had no choice but to rule in favour of the employee.

 

[NorfBank]

Apparently the bank did not even contest the court case, which I assume means the court had no choice but to rule in favour of the employee.

They say they could not contest the Court case as they had no defence.

AIB said that to be allowed by the court to enter a defence, the bank would have had to swear an affidavit that it had a bona fide defence and was not simply seeking to postpone judgement.

The bank received external legal advice that it did not have a bona fide defence and therefore could not swear that it had. This advice was subsequently repeated by another external legal firm.

 

[Smart_Saver]

No, it is the Capital Markets division that the bonus applies to. They do not provide home loans.

Fair enough. When you look up that division there is a lot of info. One link I thought was interesting was this one based on the fund performances. Especially when you look at how they have performed over a 3 year period bearing in mind that in the 1-2 period they have been performing quite well. anyways here's the link. [broken link removed]

 

[Sunny]

Also how often have the Government not contested issues based on the advice on the Attorney General in the past couple of years. (Pensions, bonuses etc). And yet Harney thinks AIB should waste Court time.

[broken link removed]

 

[Shawady]

They say they could not contest the Court case as they had no defence.

I would assume inability to pay would be a strong reason. Whether or not this would constitute a legal defense I don't know.
Also, the MOF is the major shareholder. If he is talking about drafting legislation to tax bonuses at 90% for next year, surely he could have done something in time for this year's budget if he was aware of the situation?

 

[onq]

This is a disgraceful turn up for the books.

I found two other links here;

http://www.broadsheet.ie/2010/12/09/meet-aibs-john-foy-hes-going-to-get-his-bonus/

The first include an embedded video with some hard language so be warned.

As a lightening of the mood - we need it - wait for the end and the comment on Michael Flately.

[broken link removed]

Its very easy to become emotional about all of this and AAM has a fairly strict no abuse/bad language policy, so I offer these alternatives in case you want to let go, but don't want see your posts deleted.

ONQ.

 

[onq]

Apologies if this is has already been posted here.

[broken link removed]

AIB IS to pay up to €10 million in backdated bonuses to approximately 90 employees following a High Court ruling last week.

That woorks out at an average of €111,000 per employee.

That is just their bonuses!!!

Are these the people whose sales-led bonus incentives led us into this mess in the first place?

Are they now picking their bonuses off the bones of the economy they helped to destroy?

If this is so, it really is too much and something must be done about it.

ONQ.

"There are two ways to conquer and enslave a naton. One is by the sword, the other is by debt" -John Adams.

 

[orka]

I really don't understand the level of abuse being hurled at the individual employees who are just trying to look after their own finances as I'm sure anyone posting on here would. The whole 'it might be legally correct but ethically they shouldn't take it' view is just garbage - the capital markets division of AIB is no more to blame for the mess (on the contrary, their good performance has made the problem less bad than it would have been) than anyone else in the country. In the realm of 'legally correct but ethically bad', I think retiring government ministers and TDs accepting their lump sums should be ashamed of themselves many times over before I would point the finger at someone in AIB capital markets trying to get what is effectively conditional salary.
Why is it okay (or at least not prone to the level of abuse that AIB employees are getting) for Dermot Ahern to walk off into the sunset with his huge lump sum and his huge pension pot (I've seen estimates of its total value being 3m+ given his young age) when he is waaaay more culpable for damage to the country's finances than the AIB employees? His employer is in not much better condition than AIB, the money basically comes from the same pot and he can actually be considered 'to blame' so why is there no clamouring about ethics/morals in him accepting his retirement bonus?

 

[kaplan]

[broken link removed] RTE news carrying the story. Seems Lenny's got egg on the chin again and taken four days to wipe it off.

 

[putsch]

No, it is the Capital Markets division that the bonus applies to. They do not provide home loans.

The bank should plead inability to pay or provide share instead of cash due to their current financial position.

Are you saying there are 2,500 people in the capital markets division? I don't think so................ but if there is then there's a big problem right there.

Personally I am extremely suspicious about this whole carry on and the litigation that was taken, not defended and is now being used as a rationale for paying a much wider set of bonuses.

Its because of the discredited and distorted bonus system that inappropriate products were being sold at an unsustainable rate to unsustainable borrowers that got us here. And now they want to pay more?

 

[Latrade]

[broken link removed] RTE news carrying the story. Seems Lenny's got egg on the chin again and taken four days to wipe it off.

In think that's excellent news, finally the government interferes with contracts of employment on the basis of public opinion. Funny they didn't do that with minister's pay, expenses, pensions or senior civil servants, or the croke park agreement, oh and when they decided to pay all the bonuses in fas and Anglo on the basis of contracts of employment.

Well i wonder if lenihan will pick up the tab for the huge legal fees AIB will now face when it's taken back to court. If the government is so powerful that it can allow companies to ignore the high court, if the government is above the law of the land and the constitution, how come they've been so weak in sorting out the state of the country?

 

[AgathaC]

Funny they didn't do that with minister's pay, expenses, pensions or senior civil servants, or the croke park agreement, oh and when they decided to pay all the bonuses in fas and Anglo on the basis of contracts of employment.

This is what riles me also and as another poster has mentioned how come there is little or no media attention on the packages that the likes of Dermot Ahern will walk away with?