Why is Administrator of Newbridge Credit Union paid so much?

Discussion in 'Credit Union issues' started by Rudolph, Jan 14, 2012.

  1. Rudolph

    Rudolph Frequent Poster

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    Is it really any wonder this country is the way it is. Reading in the paper today that the 'special manager' Mr Charleton is going to be paid 423 euro an hour and his assistants from 150 to 423 an hour. So lets just do the maths here. 423 an hour, say he works 35 hours a week he is costing c14,800 per week. Say he works on this for a year, we'll give him 4 weeks off, he might want more but probably thinks he can't afford to miss any work, so his 48 weeks will see him paid c710k. That doesn't include pay for his colleagues. Who is actually picking up this tab is it Newbridge CU or the taxpayer?
    How come if the CB wasn't happy with the make up/competence of all the board members that it hasn't acted before now? An absolute disgrace to pay somebody this amount of money due to the incompetence of both the Credit Union and the Regulator for not getting in suitable people on to the board earlier and saving the credit union members or the taxpayers this obscene money. I wonder are there any other CUs in similar situations?
     
  2. Brendan Burgess

    Brendan Burgess Administrator

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    I moved this from this thread so you can let off steam about this issue, without taking the main thread off course.
     
  3. tiger

    tiger Frequent Poster

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    I'm wondering if the article was imprecise in the language used.
    There's a difference between "being paid an hourly rate" and "charging an hourly rate".
    The former suggests it's a full time salary he receives, the latter is what E&Y are getting for his "billable time".
    If it's a short term, part time arrangement then I'm ok with this.
    Put another way, I might pay €100 a night for a (nice) hotel, but I won't pay that for 365 days!

    As an aside, it seems to me there's just as much focus on how much is being paid vs. how & why has the situation arisen, and how much in difficulty is the rest of the CU sector?
     
  4. Rudolph

    Rudolph Frequent Poster

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    I agree with you Tiger a lot depends on the length of time he will end up working on this. It mentions that he has to prepare a report within a month but that in itself doesn't mean his work will be complete within a month. We know from tribunals, for example, that things end up taking much longer than initially expected. Why don't they put a cap on the amount of money that will be paid over to E & Y/Mr Charleton, which would then possibly act as an incentive to sort it out asap but, if the wrong figure is used, it could also be used as a target. E & Y obviouly didn't cover themselves in any glory in their Anglo dealings.
    Your second point, which I alluded to earlier as well, is why and how this actually happened and what the Regulator has done to date on this case. We now appear to have one of the most over resourced regulatory regimes in the world, on a per capita basis, and a lot of whom are being paid well above the average industrial wage yet we continue to have the likes of this and the Custom House 'horror'. If our regulator and the auditors of these firms and credit unions etc. don't pick up on rogue managers and dubious practices before they happen, what exactly are they doing? It should also be taken into account that the Central Bank is taking on some staff who in a previous life worked in senior positions for institutions who have brought the country to where it is today.
    And finally as I asked earlier in relation to this specific issue who is picking up the tab, the taxpayer or members of Newbridge CU?
     
  5. rossie2010

    rossie2010 Registered User

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    I think it odd that the High Court has appointed ernst and Young, anglos auditors, to act as special manager
     
  6. rossie2010

    rossie2010 Registered User

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    appointment is for minimum of six months so its going to cost over €440,000 approx., surely this would go someway to fixing their balance sheet?
     
  7. ontour

    ontour Frequent Poster

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    There is an inconsistency as people are comparing a salary paid to an individual to a fee paid to a consultancy firm. It is shoddy reporting that is giving the impression that this is what Mr Charleton is being paid. This is what is being paid to Ernst & Young for his service, their office costs, insurance, staff training, legal team etc. etc.

    I would say that Mrs. Charleton has been getting very excited reading the newspapers for the last few days !
     
  8. Protocol

    Protocol Frequent Poster

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    Professional acc fees in Irl are way, way too high.

    Wouldn't 100 ph be enough?

    Acc firms are yet another example of massive, bloated costs in Irl.
     
  9. T McGibney

    T McGibney Frequent Poster

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    Dunno about that. Would E&Y or PwCs UK or USA units charge lower fees to administer a troubled small financial institution? I doubt it. They certainly wouldnt do a bog-standard SME liquidation for €100 an hour.
     
  10. Rudolph

    Rudolph Frequent Poster

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    This 423 an hour rate does not include costs for other staff, which may range from 150 to 423 an hour. I just think this level of remuneration is absolutely scandalous in this day and age. Why couldn't the CB negotiate a better rate than this or put some sort of a tender in place amongst the big audit firms for this type of work? Chances are this will become more common place across the financial services industry in the coming years. The CB is obviously concerned about the financial position of this CU but by its very actions it has made its situation so much worse. Firstly these fees probably won't be far off a million and secondly the amount of deposits/savings that will now be moved out of Newbridge CU will be huge. I read somewhere that there was a huge crowd there on Saturday looking to withdraw their savings. Hopefully Primetime will do a full investigation into this and we'll find out the full story.
     
  11. mandelbrot

    mandelbrot Former user

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    Yes, because they've never made a complete haims of a story before...
     
  12. T McGibney

    T McGibney Frequent Poster

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    ... and nobody in RTE is earning 423 euro per hour :rolleyes:
     
  13. jack2009

    jack2009 Frequent Poster

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    Not to labour your point but there is a difference between what a partner or their staff charge per hour and what they earn! According to Irish Times, Pat Kenny earns pretty much 423 per hour (salary €730,000 2009)
     
  14. Brendan Burgess

    Brendan Burgess Administrator

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    Folks, why do you always focus on the high fees of accountants and never acknowedge when they are reduced.

    Mr Charleton's fees have been reduced to a, very reasonable, €375 per hour!

    Brendan
     
  15. Marion

    Marion Moderator

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    Maybe, Brendan, because they are so outrageous!

    Marion
     
  16. Centaur

    Centaur Frequent Poster

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    How are the picked...

    I'm a Chartered Accountant with over ten years direct experience of credit unions who would gladly work for €100ph. I just don't have E&Y's connections.
     
  17. ajapale

    ajapale Moderator

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    Either way the appointment should got through the standard public procurement process and a the manager/management firm drafted off a list of qualified firms.
     
  18. 44brendan

    44brendan Frequent Poster

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    Unfortunately theere is a tendency from financial institutios in this country (amongst others) to focus on the big 4 accountancy bodies when issues like this need to be farmed out to experts. Charge per hour is generally set at the level of senior partner, whilst in reality the majority of the work is being done by juniors and trainees. It's a mindset issue and value for money seems to be left out of the decision making process. Hence, the high costs associated with this elite group
     
  19. jack2009

    jack2009 Frequent Poster

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    You still end up at square one as only the larger firms have any experience of administrations and therefore the smaller firms will not win the bid due to lack of experience.
     
  20. ajapale

    ajapale Moderator

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    OK this may be true but at least if you go through the public tendering process it is transparant and competitive.