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



## fender

http://www.independent.ie/national-news/bailedout-aib-to-pay-top-staff-euro40m-bonus-2454086.html

I accept we all have to shoulder the burden of getting the country back on its feet until I read headlines like this! This kind of carry on rightly angers people.


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## aristotle

Constantin Gurdgiev just tweeted that "AIB bonuses for 2008 is roughly the amount of cuts to the blind and disabled supports in Budget 2011. Another complete failure by the Gov!"

Although even if the bonuses were not paid it doesnt mean that any budget cut backs would be reversed.


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## Brendan Burgess

> In a move certain to spark fury, the bank has decided about 2,400 staff  must be paid the bonuses for legal reasons after several of them took  court action.



So what should the bank and its owners do? 

Should they ignore the legal advice and fight it in the courts and waste further taxpayers' money on losing a case? 

I heard Roisin Shortall(?) on Morning Ireland being highly critical of this payment to overpaid bankers.  There are 2,400 staff involved in this. Presumably most of these are union members. Why does she not call on the trade unions to get their members to give up this bonus?


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## alaskaonline

> Brendan Burgess: Should they ignore the legal advice and fight it in the courts and waste further taxpayers' money on losing a case?



no they shouldn't. they got themselves into this mess and need to stick it out. however in the future whoever they employ, they have to ensure that there are no bonus promises especially not signed into contracts and therefore are not leaving themselves open for court cases. ridiculous!

i could start with morals that those who actually tried the court route should have a conscious and not demand a bonus. after all it is a "bonus" and not their salary being cut. but morals get us nowhere with these people. if i read it correctly in the indo this morning, those bonuses date back to 2008 when the troubles with AIB started so they can all be really proud of their achievements.

then again, those bonuses will be taxed so some of it comes back into the system right?


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## Mucker Man

Why don't the government introduce a tax of 99% on Banker's Bonuses. They are passing loads of legislation at the moment for the budget, one more piece shouldn't be too much trouble.


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## Murfnm

If the bonuses were for Bank staff that had no influence in the business side - e.g. bank staff - would there be objections?


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## Smart_Saver

The Govt/State are the effective owners of these institutions now. You would imagine that pressure could be applied to these staff who are demanding their bonuses e.g. Of course we will pay you - if your legal challenge holds up. However we are going to be shedding a lot of staff in the immediate future. So what was your name again ??


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## Sunny

According to rumours there a few people in Anglo considering Court Action over unpaid bonuses!!

I can see why AIB have to pay but am very surprised that it is so high. I know from other Irish banks, some people got bonuses because of performance targets been met and they were contractually entitled to the bonus but not to the same extent as AIB. Their employment contracts would make interesting reading.


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## tallpaul

If people are suitably outraged by this behaviour and are account holders in AIB, should they not vote with their feet? 

Might send a suitable message to the 2,400 seemingly litigious 'executives' in the bank...

Thankfully I have not, nor never have, had a penny in that institution.


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## QED

Sunny said:


> Their employment contracts would make interesting reading.


 
Maybe we need an Irish WikiLeaks !!


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## DB74

Brendan Burgess said:


> So what should the bank and its owners do?
> 
> Should they ignore the legal advice and fight it in the courts and waste further taxpayers' money on losing a case?
> 
> I heard Roisin Shortall(?) on Morning Ireland being highly critical of this payment to overpaid bankers. There are 2,400 staff involved in this. Presumably most of these are union members. Why does she not call on the trade unions to get their members to give up this bonus?


 
Here's what they should do.

The Govt should set up a brand new Ltd company caled AIB2 Ltd. Sell their shares in AIB to this new company and transfer ALL business to the new company. Make every single staff member redundant paying only statutory redundancy and force them all the reapply for their jobs on brand new contracts, refusing to employ those who threatened to take them to court. They should then put AIB into liquidation, thus ensuring that the bonuses can't be paid.

I doubt the legal costs would be that significant in the greater scheme of things if the State fought the employees looking for the bonuses. 1 or 2 cases will set the precedent. Also it will cost the AIB staff in legal fees as well AFAIK.

The State has my permission to fight them all the way to Europe as far as I'm concerned.


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## dewdrop

I doubt very much if many of these people getting the bonus are members of the IBOA.


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## Sunny

DB74 said:


> Here's what they should do.
> 
> The Govt should set up a brand new Ltd company caled AIB2 Ltd. Sell their shares in AIB to this new company and transfer ALL business to the new company. Make every single staff member redundant paying only statutory redundancy and force them all the reapply for their jobs on brand new contracts, refusing to employ those who threatened to take them to court. They should then put AIB into liquidation, thus ensuring that the bonuses can't be paid.
> 
> I doubt the legal costs would be that significant in the greater scheme of things if the State fought the employees looking for the bonuses. 1 or 2 cases will set the precedent. Also it will cost the AIB staff in legal fees as well AFAIK.
> 
> The State has my permission to fight them all the way to Europe as far as I'm concerned.


 
The High Court has ordered AIB to pay the bonuses. Are you saying they should be in comtempt of court?


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## DB74

Sunny said:


> The High Court has ordered AIB to pay the bonuses. Are you saying they should be in comtempt of court?


 
I didn't see that - where did you see that


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## NorfBank

Sunny said:


> The High Court has ordered AIB to pay the bonuses. Are you saying they should be in comtempt of court?



Playing devil's advocate here but what would happen if AIB were held in contempt of court? What's the punishment - is it a fine? Is there a maximum fine? Will the fine be less than €40m?


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## Sunny

DB74 said:


> I didn't see that - where did you see that


 
http://www.rte.ie/news/2010/1209/aib-business.html


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## DB74

Thanks for that. Bit strange that the Indo didn't mention that (or maybe not)


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## Sunny

NorfBank said:


> Playing devil's advocate here but what would happen if AIB were held in contempt of court? What's the punishment - is it a fine? Is there a maximum fine? Will the fine be less than €40m?


 
Have no idea to be honest. Don't think you can just be fined for compempt but then continue to ignore the original judgement. Just guessing though.


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## nediaaa

if you are raging about this and are an AIB customer you should move your account immediately


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## Mpsox

NorfBank said:


> Playing devil's advocate here but what would happen if AIB were held in contempt of court? What's the punishment - is it a fine? Is there a maximum fine? Will the fine be less than €40m?


 
worst case, the judge could imprison the company directors.


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## Brendan Burgess

Mpsox said:


> worst case, the judge could imprison the company directors.



No - worst case is that the court tells them to pay the €40m anyway.


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## witless1

Sunny said:


> The High Court has ordered AIB to pay the bonuses. Are you saying they should be in comtempt of court?



Is that judgement in the public domain?  

It mightn't necessarily apply to the contracts of all 2,400 staff getting bonuses this time.  Maybe it's a nice convenient defence?


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## SteH

Whatever happens I'm moving bank now. This is a 100% insult. I used to think all banks were equal but some are more equal than others. Vote with your feet and get out of AIB.


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## Shawady

nediaaa said:


> if you are raging about this and are an AIB customer you should move your account immediately


 
I agree. There are other banks and if people want to show their disapproval, change their account to a bank that is not paying bonuses (If there are any?) or a bank that has not been bailed out by taxpayers money.


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## charlie MacZ

A slap in the face to all taxpayers. It disgusts me.


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## NorfBank

Mucker Man said:


> Why don't the government introduce a tax of 99% on Banker's Bonuses. They are passing loads of legislation at the moment for the budget, one more piece shouldn't be too much trouble.



Good idea.

http://www.breakingnews.ie/ireland/...lation-to-tax-40m-bankers-bonuses-485055.html


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## SteH

NorfBank said:


> Good idea.
> 
> http://www.breakingnews.ie/ireland/...lation-to-tax-40m-bankers-bonuses-485055.html



the last sentence says: _But the Government says its hands are tied on bonus payouts that were in people's contracts. _

Firstly, the government have shown they can do anything they want. Secondly, what type of contract do these people have. I thought a bonus is performance related. Just turning up for work gets you a bonus??? 

This guy has it right: http://www.youtube.com/watch?v=koY6kXhQDQo


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## frankmac

SteH said:


> the last sentence says: _But the Government says its hands are tied on bonus payouts that were in people's contracts. _
> 
> Firstly, the government have shown they can do anything they want. Secondly, what type of contract do these people have. I thought a bonus is performance related. *Just turning up for work gets you a bonus??? *
> 
> This guy has it right: http://www.youtube.com/watch?v=koY6kXhQDQo


 
Im afraid that in the land of the politician "just turning up for work" is indeed worthy of a payment.


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## TarfHead

Guy named in The Guardian article shares a name with this guy.

To quote Jon Stewart, '_Sometimes the comedy just writes itself_'


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## rustbucket

I think the negative reaction to this is a little over the top, sparked once again by the media- who rarely present all the facts.

The bonuses are being paid to 2400 staff in AIB. Not all of them.

The bonuses are being paid to staff who have them written into their contracts. Thus the high court ruling that they have to be paid.

While there are probably a good few of those 2400 staff on good salaries, I would imagine that quite a lot of them are on very basic salaries with payments based on percentage of profits/business they bring in.

These might relate to certain areas of the bank eg Fund Management or Currency broking that *MAY *still be profitable.

Imagine you are a sales rep working for a sales company. Your contract is for €15K per year plus commission. You sell loads of product for the company, but the company is is not profitable overall. You dont get paid your commission. Is that fair?

Im not saying I agree with the overall bonus culture. It should be changed or capped. However, the media has blown this completely out of proportion. 

The majority of the individuals receiving the 'bonus' or in some case 'commission' payments have them in their contracts. They legally have to pay them.

Most bonuses are performance related. So as above, If they did their own job, and brought in x amount of business or x amount of profit for a particular unit or from particular clients then why shouldnt they get their bonuses? Its in their contract.

Public sector workers went on strike and protests when the terms and conditions of their contracts were in danger. Granted they made some concessions, and ideally the staff in AIB receiving the bonuses should also make some concessions.

Common sense should prevail here. The judge obviously agreed and legally they should be paid.

Discretionary bonuses on the other hand are different. These are simply whether the company feels you have done a good job and are paying out a bonus- like a Christmas bonus- thats a different story


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## Shawady

The contracts were signed before 2008. Things have changed dramatically since then. The employees receiving the bonuses may be in a profitable part of the company, but the company is essentially broke. If it were not for taxpayers money and the NPRF, they may not have a company to work for.
I agree the bank has to abide by the court ruling but there is no moral justification for taking this money. 
It's just typical of this country. Everyone agrees sacrifices have to be made, once it doesn't affect their terms and conditions.


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## frankmac

Shawady said:


> The contracts were signed before 2008. Things have changed dramatically since then. The employees receiving the bonuses may be in a profitable part of the company, but the company is essentially broke. If it were not for taxpayers money and the NPRF, they may not have a company to work for.
> I agree the bank has to abide by the court ruling but there is no moral justification for taking this money.
> It's just typical of this country. Everyone agrees sacrifices have to be made, once it doesn't affect their terms and conditions.


 
^
This in a nutshell


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## orka

I don’t know the details of all the employees involved but for the publicised case, this is not a little ‘well-done’ bonus at year-end that can be easily foregone. Traders are paid relatively* low basic salaries and expect large bonuses for doing their jobs well – that’s the structure put in place to incentivise them to perform well in a high-pressure environment. When a trader takes a job, he might be choosing between a job at 150K basic plus potential for a 50K bonus or a job at 75K basic with potential for 300K bonus. The low basic/high bonus is preferred by employers for low cost upfront and incentive purposes; and by employees sure of their worth because they expect to perform well and get a big bonus. If I were an employer taking on a trader, I would be worried by someone who wanted a high basic/low bonus because they wouldn’t exactly be sure of their worth. That this guy took the risk of a low basic and performed well should be applauded and rewarded as contracted – if he hadn’t performed well, AIB would be in even smellier manure business than they currently are (AIB capital markets has performed well throughout the crisis and a good trader can make millions for his company). If he had been on a basic of 150K, paid as scheduled in 2008, no-one would have heard of him or be moaning about his remuneration.
As state shareholders of AIB now, would you rather pay a trader 235K and have him make millions for the company? Or not? A good trader is not that easily replaceable but a good trader can find another job at the same rate.

* relative to their overall expected annual compensation – I know there will be a clamouring on here that it was a fantastic basic salary but in a job where the going rate for a good trader is at least a few hundred thousand, it’s really not.


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## Ask the dog

This guy has it right: http://www.youtube.com/watch?v=koY6kXhQDQo [/QUOTE]

SteH - Listening to that guy has made my day. His reponse to the interviewer when told "Michael Flately is from Chicago" is priceless. Thanks for the laugh.


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## oldnick

contracts , contracts - what contracts ? 

I thought i had a contract when the govnt offered to forego taxes on all rental income, (regardless as to whether it was all section23)  until an agreed level had been reached. 
I accepted the offer and I bought  -with a large loan - section-23 type properties in order to lessen tax on my non-23 rental

The fact they've collapsed in price is my bad luck, the fact rents have gone down is my bad luck, the fact that "second property"  fees are increased each year is my bad luck.

But telling me to pay tax on rental income from 1 January on non23 properties must surely be a breach of contract. (besides the fact i just dont know where I'll find the money).

if the govnt can do that , and so far the consensus is that they can,  then why not cancel the bonus payments ??


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## Hoipolloi

The Government should explain to the Court:

 "Your Honour, the AIB does not have any cash at the moment, as you might be aware, but we are anxious to pay our debt to these employments. 

On this basis we are delighted to give each one of them €17,000 worth of shares in AIB."

Attorney General smiles and leaves.


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## bacchus

> The bonuses are being paid to 2400 staff in AIB. Not all of them.


That's even worse....€16.5k a head!!



> The majority of the individuals receiving the 'bonus' or in some case 'commission' payments have them in their contracts.



There are big differences between bonuses and commissions...for one, tax.
And this is what i found disturbing, €16.5k paid tax free paid to some employee of a bailed-out bank while min wage dropped by 12%.

I would close my accounts if i was an AIB customer.


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## Sunny

bacchus said:


> That's even worse....€16.5k a head!!
> 
> 
> 
> There are big differences between bonuses and commissions...for one, tax.
> And this is what i found disturbing, €16.5k paid tax free paid to some employee of a bailed-out bank while min wage dropped by 12%.
> 
> I would close my accounts if i was an AIB customer.



Where are you getting tax free from?


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## bacchus

Stand corrected, not tax free... €40m won't be affected by Lenihan's intention to impose super-tax.


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## Bronte

I know people who work in a private company who are entitled to pay rises and a bonus depending on performance. Down through the years there have been times when the company has had a bad year and has said there will be no bonus in a given year nor a pay rise. Despite the contract one would never sue so I don't understand how AIB staff would sue. If one sued one would be fired. Plain and simple. And if one were not fired immediatly it would happen that the job would no longer exist. If one then sued for unfair dismissal one would get paid a certain amount but it would not equal one's salary for the rest of one's life. 

So I cannot understand contract or not when a business is bailed out by the taxpayer why the staff aren't all called together and told times are tough, no bonus and 10% pay cuts all round.


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## Deas

The IBOA showed their true colours this morning. They only want the senior management and execs who will share in this bonus to defer the payments until the Bank can afford to pay!!! AIB is practically a state company and will remain this way long after many of those involved are dead I would imagine - so he wants the taxpayer to look after them. Larry Broderick, who confirmed that the individuals involved are not members said this on Morning Ireland this morning.

His own members that (rightfully) have not received anything on salary for the best part of two years can go swing; but those he does not represent should have their cake and eat it. It says it all really. Anyone who attended any union march against now know what IBOA and ICTU really think of them!!

If I was a member I'd withdraw my membership immediately. Larry signifies all that is wrong with unions and their leadership in this country.


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## jpd

It just proves that the banks are run by the management for their own benefit - not the owners or any other stakeholder.

What is the point of nationalising the banks, if they contimue to be run by and for the management. They should all be fired !


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## Mpsox

Bronte said:


> I know people who work in a private company who are entitled to pay rises and a bonus depending on performance. Down through the years there have been times when the company has had a bad year and has said there will be no bonus in a given year nor a pay rise. Despite the contract one would never sue so I don't understand how AIB staff would sue. If one sued one would be fired. Plain and simple. And if one were not fired immediatly it would happen that the job would no longer exist. If one then sued for unfair dismissal one would get paid a certain amount but it would not equal one's salary for the rest of his life.
> 
> So I cannot understand contract or not when a business is bailed out by the taxpayer why the staff aren't all called together and told times are tough, no bonus and 10% pay cuts all round.


 
I don't have a problem with people getting a bonus in principle, providing it is earned (and this is not clear in the AIB situation) and the company can afford to pay it. In my own case, I've gone 2 years without a rise (indeed taken a paycut) or a bonus but know I will get something this year as the company has got itself in a position to pay it. However whilst I was disappointed not get something in the past, I also had to be realistic about it. I had a job which was more then a lot of my former colleagues have.

Frankly, as a manager, if I got a "stretch" like this on my budget and was forced to pay these bonuses, then I'd be expected to make savings elsewhere and that would usually involve forced redundancies. If €40m comes out of AIBs budget for these, then AIB managers/Govt should be forced to make such savings elsewhere so that at least the overall cost is neutral. 

I'd love to know what roles are getting these bonuses, 2400 staff is a fair % of AIB workforce


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## Bronte

In case there is a misunderstanding there is nothing wrong with a bonus or anything wrong with no bonus or pay rise when a company is in trouble.  AIB is on it's knees, the Irish taxpayers is paying for the AIB staff, the taxpayer is taking hits everywhere and AIB staff have had no salary reductions and are entitled to a bonus.  What kind of cuckoo world is that.  Who do those AIB staff think they are to be taking such a stand.


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## TarfHead

Mpsox said:


> I'd love to know what roles are getting these bonuses, 2400 staff is a fair % of AIB workforce


 
Some detail in The Guardian.

Not everyone receiving a bonus is a well-paid 'fat cat'.



> 62 executives shared €11.1m in 2009 with two executives landing €710,000 between them in 2010.
> • 674 managers shared another pot of €30.06m in 2009 with another 41 due €3.06m this year.
> • 700 junior management share €9.2m
> • 1,389 staff shared another €4.49m
> • €17.1m was paid in 2009 to overseas staff on foot of legal action relating to 2008
> • €35.5m was paid this year following legal action and a further €3.7m was paid to staff in AIB Capital Markets in 2010 in respect of deferred bonuses relating to work in 2006 and 2007.
> • €2.4m was paid to junior management and staff at call centres in Ireland, Jersey and the Isle of Man.


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## Sunny

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.


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## Murfnm

I'm in the IBOA and I have not had a pay rise in over 2 years - which members are you referring to?


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## JCB123

Forget the word BONUS, this is simply a pay structure that holds back a large portion of your pay to see how you perform. In other words if your the type of employee who arrives at 9, leaves at 5, does whatever you're asked and no more - you get a very basic pay and little or no bonus. Need to remember we own the Bank now and need to make a return on it. Is it really in our best interest to pay top performers a really basic wage? There is some merit in this system and we need to make sure we are not shooting ourselves in the foot with all this "outrage!"


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## rustbucket

I think its important to distinguish between the types of bonuses that people are talking about. Some people appear to be using the same term when speaking about bonuses such as Christmas bonuses and specific contract bonuse that is part of your renumeration.

Its like comparing apples with Oranges

In a non state organisation (like AIB was) There were two type of common 'extra bonus' payments.


The first is like an annual bonus or Christmas bonus. If the company was profitable they may and did issue discretionary bonuses at different levels to members of staff. If a staff member worked above and beyond, or excelled in particular tasks- his hard work would be rewarded with an anual bonus. This is usually decided upon by their immediate manager based upon an approved bonus pool for his/her department from management.

I would be very surprised if any company in Ireland is paying any of these bonuses at the moment. They are discretionary and do not form part of any contracts. They are in effect- a bonus! By the way- these are fully taxable

The type that is being talked about with regard to AIB are contractual bonuses. Im not even sure bonus is the correct word to be using. As someone already mentioned they are a percentage of profits paid to employees who bring in that business or make that profit- ie Currency traders etc. The vast majority of these guys are on a very basic salary (for their Job spec). They rely on the majority of their renumeration from these bonuses. Most place pay these quarterly.

If they dont make money, the most they get is their basic. If they frequently dont make money, they end up getting the sack!

If a stockbroker or trader is on a basic of €25K, Most of them (or at least they used to) didnt really care about their basic salary, it was the figures relating to their profits and sales that formed the basis of their pay!

As someone said, High pressure environment, high pressure job, high staff turnover. 

I am a taxpayer like everyone else. I dont begrudge these guys (or most of them) what they are entitled to- What they earned.

They earned profits for AIB and are paid their salaries on the basis of what they earned. In effect, they have not been paid what they have earned. I dont think anyone would be happy with this situation.

The question of whether the bank can afford to pay it is another story. These funds have probably been sitting on deposit in some bank account set aside for commission, salary and bonus payments. 

They also have an account for the Taxman- Would the taxman say to AIB- Hey dont bother paying us what you owe us- coz you cant afford it!


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## Complainer

Isn't it funny how they can rush through legislation (some of it overnight) to put up the price of petrol and cut social welfare, but they can't rush through legislation to tax bankers bonuses?


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## frankmac

I think they can rush it through for a current or future year, but not retrospectively


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## Complainer

It didn't have to be retrospective. The bonus hadn't been paid yet.


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## frankmac

From what I heard on radio this morning it will be treated as 2008 income.


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## TarfHead

frankmac said:


> From what I heard on radio this morning it will be treated as 2008 income.


 
But, if paid in January 2011, won't each payment be liable to the taxation changes in this week's Budget, e.g. USC ?


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## frankmac

TarfHead said:


> But, if paid in January 2011, won't each payment be liable to the taxation changes in this week's Budget, e.g. USC ?


 
That sounds logical, however Im only reporting what I heard from the tax expert on morning ireland. She said the bonuses would have to be taxed as 2008 income.

I cant see the logic in that. Emoluments paid after January 1st but earned prior to that are taxed as income in the year of payment as far as I know


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## Complainer

GoMayoGo said:


> The Govt/State are the effective owners of these institutions now. You would imagine that pressure could be applied to these staff who are demanding their bonuses e.g. Of course we will pay you - if your legal challenge holds up. However we are going to be shedding a lot of staff in the immediate future. So what was your name again ??



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



frankmac said:


> Emoluments paid after January 1st but earned prior to that are taxed as income in the year of payment as far as I know


But can't legislation be passed to change this rule?


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## frankmac

Complainer said:


> Public sector employers do not bully their staff, even if their staff are attempting to bully them.
> 
> 
> But can't legislation be passed to change this rule?


 
Why would you want to?


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## orka

frankmac said:


> Emoluments paid after January 1st but earned prior to that are taxed as income in the year of payment as far as I know





Complainer said:


> But can't legislation be passed to change this rule?


I don't think you want to change that rule - you want to make sure that rule happens...  ie that a bonus earned in 2008 but paid in 2011 is taxed in the 2011.  Posts further up seem to imply that someone is saying 2008 earned bonuses are taxed as if paid in 2008 but I'm pretty sure that is incorrect.  As long as the employees are PAYE, taxes are based on year of payment.  I had a bonus agreed/communicated in December 2008 but not paid until January 2009 - and it was 2009 tax that applied - and my employer got the advice direct from the revenue.


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## frankmac

orka said:


> *I don't think you want to change that rule - you want to make sure that rule happens... ie that a bonus earned in 2008 but paid in 2011 is taxed in the 2011*. Posts further up seem to imply that someone is saying 2008 earned bonuses are taxed as if paid in 2008 but I'm pretty sure that is incorrect. As long as the employees are PAYE, taxes are based on year of payment. I had a bonus agreed/communicated in December 2008 but not paid until January 2009 - and it was 2009 tax that applied - and my employer got the advice direct from the revenue.


 
Thats what I was trying to say. The point about it possibly taxed as 2008 income is only what I heard said on radio this morning.


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## ashambles

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.

Quite possibly they would even be paid if the company went bankrupt, the bonuses could in theory be given to a third party.

If these staff have to give up these bonuses then for fairness senior DoF/Central Bank/Regulator staff should return bonuses "earned" up to 2008 as their employer is also nearly bankrupt and under EU/IMF ownership.


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## Complainer

frankmac said:


> Why would you want to?





orka said:


> 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.



ashambles said:


> 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?


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## 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


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## kdoc

Black Sheep said:


> 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.


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## 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.


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## 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

Complainer said:


> 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.



Sunny said:


> 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

GoMayoGo said:


> 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

Shawady said:


> 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

ontour said:


> 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

NorfBank said:


> 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

ontour said:


> 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

kaplan said:


> [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

Latrade said:


> 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?


----------



## onq

Given that Foys payment has been the subject of a legal action not defended he is likely to be paid. But Foy is not the only one to get these outrageous bonuses, the very incentives that led to the "selling at any cost" business model that has overinflated our economy and bankrupted the state.

From: [broken link removed]

------------------------
_Last week, Mr Lenihan announced that 90 per cent of bonuses paid to bankers would be recouped by the exchequer in tax after it emerged AIB staff would share tens of millions in bonuses for 2008.

Mr Hodgkinson had said the payments reflected AIB’s past and was “not the way we intend to conduct ourselves in future”.

*Mr Lenihan said in a response to a parliamentary question that some 2,869 AIB employees were paid €58.65 million in deferred bonuses this year and last year.

Some €35.5 million was paid this year following legal action and a further €3.7 million was paid to staff in AIB Capital Markets in respect of deferred bonuses relating to work in 2006 and 2007. Some 62 executives shared €11.11 million, or an average of €179,000 each, for 2009, while 674 managers shared €30 million or an average of €44,000 each.*_

------------------------

Look at the figures - these guys were paid €58.65 million between 2,869 of them or over €20,442 each  - in BONUSES!!!
That's more than a man with a small family on the dole will get from the state - that amount is greater than his entire income for a year.

Companies that can afford to pay incompetent people bonuses like this are running a huge profit margin.
Profit margins like that are a tell-tale sign of monopoly and cartel conditions - so none of them are "clean".

As for orka wondering what my problem is - that should be enough for any right thinking person, but there's more.
These people are the very ones whose "incentive-based compensation" has fed into the unscrupulous lending that caused the mess we're in at the moment.

 In Foy's case and those like him, not content with the €70-80K BASIC they are on, they get up to €160K in bonus payments.
That's a quarter of a million Euro a year for pursuing lending practices that have helped bankrupt the state - frankly that is outrageous.
No wonder these people can afford to retire at 40 and spend their days playing golf and complaining about the state of the tees and the greens.

This widening gyre of discontent caused by the high levels of remuneration being paid to the top earners in capitalist systems will eventually bring down the whole sorry, corrupt edifice of croney capitalism and government in the service of Big Business.
Then we'll see what's left to pay Lenihan & Cowan's Ministerial pensions.
They all think they're untouchable.
We'll see.

ONQ.


----------



## ontour

onq said:


> these people are the very ones whose "incentive-based compensation" has fed into the unscrupulous lending that caused the mess we're in at the moment.



That is like blaming the farmer that grows barley for underage drinking.

The Capital Markets division would do a lot of  fee based services for corporate customers in the areas of trade finance, stockbroking etc.  I would be very interested to know how profitable the Capital Markets division is now.


----------



## jb724

Finally Mr Lenihan has found the guts to put a stop to this it seems . Still it shouldnt cloud our vision people as to the diasaster FF have made of our economy.Hope people dont forget when the election time comes


----------



## joey54

Has Mr. Lenihan effectively overruled a high court decision? Is this legal?


----------



## Sunny

Disgraceful decision. I presume Mr Cowan and friends will now explain why Mr Fingleton wasn't made hand over his bonus and pension pot when forced out of irish nationwide.


----------



## Westie123

Sunny said:


> Disgraceful decision. I presume Mr Cowan and friends will now explain why Mr Fingleton wasn't made hand over his bonus and pension pot when forced out of irish nationwide.



Do you mean Mr Lenihan effectively overruling a high court decision is disgraceful?


----------



## orka

onq said:


> Companies that can afford to pay incompetent people bonuses like this ....


There has been NO suggestion anywhere that the people in the capital markets division (for the avoidance of doubt onq, that would be the investment division, not the lending division) are in any way incompetent. In fact, throughout this whole debacle it has been repeatedly pointed out that the capital markets division (for the avoidance of doubt onq, that would be the investment division, not the lending division) was pretty much the only bright spot in AIB’s performance – without them, AIB would be even further in the manure business.



onq said:


> these guys were paid €58.65 million between 2,869 of them or over €20,442 each - in BONUSES!!!





onq said:


> That's more than a man with a small family on the dole will get from the state - that amount is greater than his entire income for a year.





onq said:


> In Foy's case and those like him, not content with the €70-80K BASIC they are on, they get up to €160K in bonus payments.





onq said:


> That's a quarter of a million Euro a year


Your post shows a huge amount of begrudgery that someone could possibly earn this kind of money. People do earn this kind of money all over the world and as long as they deliver for their employers, they will continue to earn this kind of money. I would prefer to pay a trader 250K and have him make 10M for the company – than a trader at 75K who loses the company 2M. Do you understand that you get what you pay for and you pay for what you get? That’s the whole point of low basic, high bonus structures – reward the people who deliver – do you have an issue with that concept? 
These are normal pay rates across Europe and the world and the one sure thing to come out of this is that AIB won’t be able to retain or recruit any decent staff for their capital markets division (for the avoidance of doubt onq, that would be the investment division, not the lending division). Tough choice as a trader eh? Hmm, earn 75K plus 160K+ bonus in a solvent bank/investment company in Ireland, the UK, Europe, the US, anywhere, ... or earn 75K plus no bonus in AIB where I will be pilloried from a distance by people who think a trained monkey could do my job... decisions, decisions... 

And finally, + 1 to Sunny’s post – what about Fingleton’s bonus and 27m pension pot? Or at least as a start, the 1m he said he would pay back.
And, again, what about Dermot Ahern’s retirement bonus and pension pot?


----------



## Sunny

Westie123 said:


> Do you mean Mr Lenihan effectively overruling a high court decision is disgraceful?



Exactly. I don't like the fact that the bonuses are paid but these were earned before the crisis. I dont see why it is possible to do this but is not possible to go after executive pension pots and bonuses that were earned on the back of reckless incompetence. This is just populist rubbish.
Suppose I should point out that I am probably biased. I work for a financial institution (non Irish!) and benefit from the same type of remuneration. I haven't had a bonus in two years but will be getting one this week. I don't necessarily agree with the bonus culture but that's the way my contract is designed and I am perfectly entitled to defend by contractual rights without government interference. Anyway, Mr lenihan takes most of it anyway!


----------



## Bronte

onq said:


> .
> They all think they're untouchable.
> 
> 
> ONQ.


 
I think you'll find they are. This latest intervention by the minister is just a stunt.


----------



## Bronte

orka said:


> Your post shows a huge amount of begrudgery that someone could possibly earn this kind of money. People do earn this kind of money all over the world and as long as they deliver for their employers, they will continue to earn this kind of money.


 
Aren't the fantastic traders in the investment division of AIB the same as those traders in the German, French and UK banks who have had to be bailed out by the EU/IMF propping up Ireland in order to transfer money to the Irish banks to save the EU banks whose traders invested in Irish banks?

Traders are just gamblers, they do not do a fantastic job, quite the opposite.  They also can never lose as they know no matter how high the gamble the politicians will not let the banks fail.  No talent whatsoever is required for that.


----------



## Sunny

Bronte said:


> Aren't the fantastic traders in the investment division of AIB the same as those traders in the German, French and UK banks who have had to be bailed out by the EU/IMF propping up Ireland in order to transfer money to the Irish banks to save the EU banks whose traders invested in Irish banks?
> 
> Traders are just gamblers, they do not do a fantastic job, quite the opposite.  They also can never lose as they know no matter how high the gamble the politicians will not let the banks fail.  No talent whatsoever is required for that.



No they are nothing like that. These guys are not mad exotic traders. Banks had one main weakness. Property. It wasn't capital markets activities.


----------



## Bronte

Sunny said:


> No they are nothing like that. These guys are not mad exotic traders. Banks had one main weakness. Property. It wasn't capital markets activities.


 
But didn't the capital markets of the foreign banks 'invest' in Irish banks who then invested (loaned) in property?  Sorry if my question seems too simple.  Banks are very complicated structures.


----------



## Sunny

Bronte said:


> But didn't the capital markets of the foreign banks 'invest' in Irish banks who then invested (loaned) in property?  Sorry if my question seems too simple.  Banks are very complicated structures.



Oh they did. Not saying people who work in capital markets aren't stupid! But if they did invest, they have more than likely lost money as the price of the assets they bought have fallen. I agree that knowing you will always be bailed out in the long term makes the game very simple.


----------



## dewdrop

Cannot follow the legal turns in this matter. Perhaps i am totally crazy to suggest that because of their financial position AIB may now be able to plead that they should be allowed to break say their Tracker Mortgage contract which is costing them millions


----------



## Sunny

dewdrop said:


> Cannot follow the legal turns in this matter.


 
Either can I. How about I declare I am not paying my taxes until they bring down the pay bill of the public service? Also A bit annoyed about how much the Financial Regulator walked off with. So I want that reversed.


----------



## Slim

Interesting article by Fintan O'Toole in today's IT which suggests that the whole bonus deal was no more than senior execs 'looting' the bank before it was effectively nationalised.
[broken link removed]


----------



## bluemac

It takes us to 8 weeks before an election for them to stand up to the banks.. at last.

My feelings are had we as a nation not stood in the company would without doubt have folded and no one would have got payouts, no jobs and they need to change the law so that if a company takes state aid to keep going, contracts no longer stand and can be changed.  

But at last... some one did somthing... even though its very very  very small


----------



## NorfBank

Slim said:


> Interesting article by Fintan O'Toole in today's IT which suggests that the whole bonus deal was no more than senior execs 'looting' the bank before it was effectively nationalised.
> [broken link removed]



That is unbelievable.


----------



## PaddyW

Slim said:


> Interesting article by Fintan O'Toole in today's IT which suggests that the whole bonus deal was no more than senior execs 'looting' the bank before it was effectively nationalised.
> [broken link removed]



That is genuinely shocking. If all stated in that is true, then somebody needs to be held responsible for it and brought to justice.


----------



## cloughy

what about all the public servants who earn a bonus, the country is broke, and hence their employers, so what about a 90% tax on bonus payments to NTMA, Central Bank, HSE etc. as whats the difference betweeen the GOVT pumping money into the banks and borrowing to pay the exenses of the state, but will these still getting bonus payments.


----------



## Bronte

I can't believe it.  There is no end to the people who run our country with no moral compass.  Who are these people that think it justifiable to mug the taxpayers of their own country.  Shame on them.  And shame on the politicians who let them. And shame on the police who do not raid them. And shame on the judiciary who only find ways to protect them.  

Well done Fintan O' Toole and the Irish Times.


----------



## brutal1

Does anyone know on what basis the high court determined that the test case bonus was payable, and subsequently paid . 
This sets a legal precedent , I assume that will be the basis of any cases taken by AIB staff  .


----------



## DerKaiser

I'm assuming it was a contractual obligation to staff.

I'm assuming the new position has to do with the threat to solvency they payments would represent which the board were unable to act upon until it was made clear the state would not guarantee the solvency of the bank if the bonuses were paid.


----------



## Purple

DerKaiser said:


> I'm assuming it was a contractual obligation to staff.
> 
> I'm assuming the new position has to do with the threat to solvency they payments would represent which the board were unable to act upon until it was made clear the state would not guarantee the solvency of the bank if the bonuses were paid.



That's what Minister Lenihan said on the radio this morning.


----------



## Shawady

Is there any chance that because of the initial high court case, that AIB could be forced to pay out the bonuses for the remaining staff?
If this case is setting a precedent could it be decided that MOF went against a court ruling and that would be unlawful?
It could possibly take months to sort out by which time it would happen on the next government's watch.


----------



## dereko1969

cloughy said:


> what about all the public servants who earn a bonus, the country is broke, and hence their employers, so what about a 90% tax on bonus payments to NTMA, Central Bank, HSE etc. as whats the difference betweeen the GOVT pumping money into the banks and borrowing to pay the exenses of the state, but will these still getting bonus payments.


 
What bonus payments are you talking about?


----------



## orka

Shawady said:


> Is there any chance that because of the initial high court case, that AIB could be forced to pay out the bonuses for the remaining staff?
> If this case is setting a precedent could it be decided that MOF went against a court ruling and that would be unlawful?


I would be surprised if a trader (the test case) didn't have a bonus written into their contract.  If FO'T's article is correct and most employees didn't have a bonus written into their contract, then possibly the ruling on a written contract might not be considered a precedent for enforcing a verbal contract.


----------



## Mpsox

Shawady said:


> Is there any chance that because of the initial high court case, that AIB could be forced to pay out the bonuses for the remaining staff?
> If this case is setting a precedent could it be decided that MOF went against a court ruling and that would be unlawful?
> It could possibly take months to sort out by which time it would happen on the next government's watch.


 
My understanding is that if someone in AIB wants their bonus, they will have to sue for it. For a lot of the staff concerned, given the value of their bonus, they may not want to be so public


----------



## rustbucket

I am quite surprised at this to be honest. The guy that took the case had a high court judgement passed in his favour that AIB had to pay. As such they will, or may already have paid it.

Surely he cant be the only one is similar circumstances. Wasnt he just the test case. If the court ruled in his favour surely they will rule in the favour of others that have similar cases (not all of them will have but surely a lot will).

Then who will pay for AIB's defence if the rest of them decide to go to court? Guess who....Muggins of course...the Taxpayer.

The delay of these payments is only going to cost us more. Granted the Bank or State cant afford them but I cant see legally how they can get out of paying them, especially now as prescedent has been set with the payment of one of them.


----------



## Shawady

I would love to know when the government/MoF knew about these bonus payments and the court case.
I cannot understand the logic if they let AIB not defend the case and are now looking for the payments not to be paid. It would have been better to insist AIB defend the case in court.


----------



## onq

orka said:


> There has been NO suggestion anywhere that the people in the capital markets division (for the avoidance of doubt onq, that would be the investment division, not the lending division) are in any way incompetent. In fact, throughout this whole debacle it has been repeatedly pointed out that the capital markets division (for the avoidance of doubt onq, that would be the investment division, not the lending division) was pretty much the only bright spot in AIB’s performance – without them, AIB would be even further in the manure business.
> 
> Your post shows a huge amount of begrudgery that someone could possibly earn this kind of money. People do earn this kind of money all over the world and as long as they deliver for their employers, they will continue to earn this kind of money. I would prefer to pay a trader 250K and have him make 10M for the company – than a trader at 75K who loses the company 2M. Do you understand that you get what you pay for and you pay for what you get? That’s the whole point of low basic, high bonus structures – reward the people who deliver – do you have an issue with that concept?
> These are normal pay rates across Europe and the world and the one sure thing to come out of this is that AIB won’t be able to retain or recruit any decent staff for their capital markets division (for the avoidance of doubt onq, that would be the investment division, not the lending division). Tough choice as a trader eh? Hmm, earn 75K plus 160K+ bonus in a solvent bank/investment company in Ireland, the UK, Europe, the US, anywhere, ... or earn 75K plus no bonus in AIB where I will be pilloried from a distance by people who think a trained monkey could do my job... decisions, decisions...
> 
> And finally, + 1 to Sunny’s post – what about Fingleton’s bonus and 27m pension pot? Or at least as a start, the 1m he said he would pay back.
> And, again, what about Dermot Ahern’s retirement bonus and pension pot?



I'm becoming good at begrudgery Orca.

For example, I don't buy your division of labour argument.

The fact that you say the Capital Acquisitions portfolio hasn't crashed yet means nothing to a layperson, so you might want to beef up your explanation with reference to what Mr, Foy and his fellow travellers actually do to earn their money.

If they're not selling something to earn that commission, it seems they are buying something. Sicne when do buyers get paid on commission? How is the value of what they have done for the company calculated? Comparison costings? I honestly don't know, I'm asking.

The culture in AIB was informed by the history of, and culture in, large Irish companies.
Get big, remove small local competition, engage in cartel like behaviour, create monopoly conditions, smooth the wa.
You name it, the tracks of the perfidy these boys engage in are everywhere, from their their bail outs to their lack of real competition driving down prices.

Let's not pretend that people trading on insider information are in any way astute, or that gambling is something that takes talent.
The former takes contacts, the latter requires the ability to place a bet, preferably using other peoples money - lots of it.
I mean, exactly WHAT brilliant investments were made in 2008 that justified a €160,000 bonus in that year?

Do I begrudge traders the right to gamble away the wealth of a country - yes I do and so should every right thinking person.

ONQ.


----------



## dereko1969

rustbucket said:


> *I am quite surprised at this to be honest. The guy that took the case had a high court judgement passed in his favour that AIB had to pay. As such they will, or may already have paid it.*
> 
> Surely he cant be the only one is similar circumstances. Wasnt he just the test case. If the court ruled in his favour surely they will rule in the favour of others that have similar cases (not all of them will have but surely a lot will).
> 
> Then who will pay for AIB's defence if the rest of them decide to go to court? Guess who....Muggins of course...the Taxpayer.
> 
> The delay of these payments is only going to cost us more. Granted the Bank or State cant afford them but I cant see legally how they can get out of paying them, especially now as prescedent has been set with the payment of one of them.


If you read the Fintan O'Toole article you will see that AIB didn't offer a defence to the action, they deliberately brought forward the issue of the bonuses so that they would be verbally agreed with staff, there's nothing in most of their contracts about bonuses. 
Banks mugging us again.


----------



## Complainer

Latrade said:


> 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.


Absolutely no tongue-in-cheek. I'm not defending AIB and I'm not supporting the payment on bonuses. 

I'm simply pointing out that the underhand sleeven approach of bullying and threatening staff is not going to happen, and should not be considered for a moment.


----------



## Mpsox

orka said:


> I would prefer to pay a trader 250K and have him make 10M for the company – than a trader at 75K who loses the company 2M. Do you understand that you get what you pay for and you pay for what you get? That’s the whole point of low basic, high bonus structures – reward the people who deliver – do you have an issue with that concept?
> These are normal pay rates across Europe and the world and the one sure thing to come out of this is that AIB won’t be able to retain or recruit any decent staff for their capital markets division (for the avoidance of doubt onq, that would be the investment division, not the lending division). Tough choice as a trader eh? Hmm, earn 75K plus 160K+ bonus in a solvent bank/investment company in Ireland, the UK, Europe, the US, anywhere, ... or earn 75K plus no bonus in AIB where I will be pilloried from a distance by people who think a trained monkey could do my job... decisions, decisions...


 
Just because a trader makes a 10m profit doesn't mean he is competent, it could mean he is lucky and the bet he placed (and that's what trading is, betting) came off. After all, the sun shone out of Nick Leasons rear end for many a long day. One of the fundamental reasons the US govt has had to bail out many of it's banks is the failure of their trading divisions to understand prudence and risk management

There is a bigger issue here and that is the fact that banks have become dependent on trading income at the expense of long term investment and a long term relationship with customers. Would it actually be such a bad thing if globally, trading was reigned in and controlled in a better manner?

As for the bonuses, my firm pays bonues, they are based on my performance, my team's performance and the companies performance overall. If the company isn't making the numbers, it doesn't get paid, simple as that


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## DerKaiser

Mpsox said:


> If the company isn't making the numbers, it doesn't get paid, simple as that


 
Trouble is how they make the numbers!

If you fool people into believing you can expand credit at a rate of 20% p.a. for a period of 10 years and enjoy bad debt provisions of close to 0% in conjunction with this policy, then you can command fairly undeserved bonuses. 

I'd propose all bonuses to be paid in shares that can only be cashed in 5-10 years after you leave the company as a way of solving this.

Give the AIB guys their 2008 bonus in shares based on the number of shares their bonus would have bought at the average 2008 share price


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## Marion

I'm just wondering if Ajai sent a little reminder note to Brian stating the money isn't available just yet. There is no mention of such an event anywhere. 

But that doesn't mean it didn't happen. Hmmm ...

Marion


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## Duke of Marmalade

Make no mistake, these people will be paid.  That is the law of the land.  Lenny has played a fast one by pretending that the payments can be stopped, knowing that when they get paid it will be under a new government.  Gilmore spotted the trap when he stated in the Dail today that these bonuses will be paid and that Lenny was only bluffing.


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## shanegl

The idea that the letter from Lenihan (pretending that he'll let the bank go bust if they pay these bonuses) should stand up in court is laughable.




> The fact that you say the Capital Acquisitions portfolio hasn't crashed  yet means nothing to a layperson, so you might want to beef up your  explanation with reference to what Mr, Foy and his fellow travellers  actually do to earn their money.
> 
> If they're not selling something to earn that commission, it seems they  are buying something. Sicne when do buyers get paid on commission? How  is the value of what they have done for the company calculated?  Comparison costings? I honestly don't know, I'm asking.


You don't seem to have a grasp on what the Capital *Markets* Group does.


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## secman

The first report i heard of the case was that the initial test case taken by John Foy was in a UK court. Is that correct ?
If so, why was it not in an Irish Court ? Would an Irish judge have dealt with it differently ?




Secman


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## NorfBank

dereko1969 said:


> What bonus payments are you talking about?



_The largest bonus was paid to former National Treasury Management Agency (NTMA) chief executive Dr Michael Somers.
He was paid €200,000 earlier this year as a performance-related bonus for 2009

Other bonuses paid in the past 12 months included:_ 

_€31,395  paid to Patricia Byron, chief executive of the Personal Injuries  Assessment Board (PIAB) as a reward for performance in 2009;_
_€40,539 paid to the chief executive of Horse Racing [broken link removed], Brian Kavanagh, in respect of 2009;_
_€9,628 paid to [broken link removed], chief executive of Waterways Ireland, for performance in 2007_

http://www.independent.ie/national-...ervice-officials-get-big-bonuses-2461174.html


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## Bronte

shanegl said:


> You don't seem to have a grasp on what the Capital *Markets* Group does.


 
Don't they gamble with other people's money knowing they will never lose?


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## Sunny

Bronte said:


> Don't they gamble with other people's money knowing they will never lose?


 
No. I think people are getting carried away with what Irish banks were doing in capital markets because of what they read about in Investment banks in London and New York. Most of the Irish banks capital markets activities are based around meeting the boring needs of their corporate clients in areas like FX, Hedging, Deposits etc etc. They also managed the banks own liquidity. There was some proprietary trading i.e. investing the banks own money in various markets but it was by no means the main area of activity for any Irish bank that I know. 

I don't think anyone like sees the bonuses being paid but as someone posted above, plenty of people in the semi state and civil service are getting bonuses despite our Public finances being in as bad a state as the banks.


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## Deiseblue

I think that if the Banks were in the same " state " as our semi states then we should sink to our knees in thanks.


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## Sunny

Deiseblue said:


> I think that if the Banks were in the same " state " as our semi states then we should sink to our knees in thanks.


 
I said our public finances were in the same state as our banks or have you forgotten the €18 billion deficit in the day to day running of this Country. And yet we still pay bonuses because it is in their 'contract' or part of an Agreement. However, we can't allow that to happen in AIB?


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## Bronte

Sunny said:


> Most of the Irish banks capital markets activities are based around meeting the boring needs of their corporate clients in areas like FX, Hedging, Deposits etc etc. .


 
Not sure but FX is Foreign Exchange I guess.  Hedging, isn't that a type of 'investment'?

For corporate clients in layman's terms what do they do?


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## Smart_Saver

Sunny said:


> I said our public finances were in the same state as our banks or have you forgotten the €18 billion deficit in the day to day running of this Country. And yet we still pay bonuses because it is in their 'contract' or part of an Agreement. However, we can't allow that to happen in AIB?


 
Correct - we can't. AIB are not the same as the other semi-states !! AIB forced this state into a takeover and forced the nation into making them a semi-state. It was not an agreed move in terms of profitability or expansion or any other reason othen than AIB were/are practically BUST. So No - it's not the same.


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## Sunny

GoMayoGo said:


> Correct - we can't. AIB are not the same as the other semi-states !! AIB forced this state into a takeover and forced the nation into making them a semi-state. It was not an agreed move in terms of profitability or expansion or any other reason othen than AIB were/are practically BUST. So No - it's not the same.


 
So its ok for us to borrow money to pay bonuses in the public and semi state sector?


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## Smart_Saver

Sunny said:


> So its ok for us to borrow money to pay bonuses in the public and semi state sector?


 
I never said it was ok for bonuses to be paid there either but you cannot compare like for like in terms of making a comparision with AIB and other semi-state or state bodies.


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## Shawady

I was under the impression that bonuses for higher paid civil servants were scrapped last year and that is why Lenihan did a u-turn on their pay cut last december.

It mentioned on the radio that there were bonus 100 payments paid in the Department of Finance. Even if we had the money, I would be sceptical that it was deserved given their track record the past couple of years.


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## Marion

> Knowing the bank was insolvent and State aid was forthcoming, AIB  executives rushed through awards and unilaterally created binding  contracts, writes  *FINTAN O'TOOLE*





> I have been in touch with one of those due to receive a bonus from AIB.  He described the story to me as “a looting of the bank by management  before the Government became involved in the institution”.





> Instead, the relevant staff were individually called to unexpected  meetings with senior managers on January 29th, 2009 – two months before  they would normally have been informed of their bonuses. They were told  that the bonus for 2008 was being brought forward and would be paid out  on February 25th – two months before the normal date. The staff were  explicitly told that the meeting they were then having constituted a  verbal contract which was legally binding. In other words, senior  managers at the bank created a legal obligation to pay the bonuses in  AIB as it was effectively being nationalised. Staff were told to keep  all of this to themselves.





> Not only were the bonuses brought forward, however, they were also  unexpectedly large. According to my source: “It was the general view of  staff that this was the largest bonus that had been paid in any year by  the bank, much to the surprise of employees



Today's article:
[broken link removed]

Marion


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## DerKaiser

Bronte said:


> Hedging, isn't that a type of 'investment'?


Clue is in the name.  If you hedge your bets are you doing something more or less risk?

Derivatives are often used to hedge.

People hear the terms hedge and derivatives and think someone is off having a laugh recklessly gambling, when the core principle is the exact opposite.

You can of course have hedge funds and purchase derivatives for outlandishly riaky gambles, but typically the reality is the more boring idea of reducing your risk exposures.


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## cloughy

..


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## Shawady

Sunny said:


> So its ok for us to borrow money to pay bonuses in the public and semi state sector?


 
They are not bonuses.

Probably in the same way we are not receiving a bailout from the IMF - it is an 'overdraft'.

http://www.independent.ie/national-news/taoiseach-civil-servants-payouts-not-a-bonus-2462240.html


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## Sunny

Shawady said:


> They are not bonuses.
> 
> Probably in the same way we are not receiving a bailout from the IMF - it is an 'overdraft'.
> 
> http://www.independent.ie/national-news/taoiseach-civil-servants-payouts-not-a-bonus-2462240.html


 
Very true. I notice the story was picked up by the British media today which was great timing considering the loan was going through parliment for approval


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## Sunny

So it's not a bonus. It's part of an overall pay bill. Seriously, why are they still talking through their behinds?

http://www.independent.ie/national-news/taoiseach-civil-servants-payouts-not-a-bonus-2462240.html


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## DerKaiser

I wish they were on performance related bonuses, everyone should have a monetary incentive element to work hard (and smart) as part of their overall package.


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## RoyRover

It really is immoral for bank staff to be suing an employer that is technically insolvent. These aptly entitled "merchant bankers" only have a job because of the munificence of the Irish taxpayer. It is completely shameful that they would sue for this, so Mr Foy can live in his Meath mansion.


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