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

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.
 
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 !
 
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.
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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
 
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.
 
Mpsox said:
I'd love to know what roles are getting these bonuses, 2400 staff is a fair % of AIB workforce
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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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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.
 
I'm in the IBOA and I have not had a pay rise in over 2 years - which members are you referring to?
 
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!"
 
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!
 
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?
 
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 ?
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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
 
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 ??
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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
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But can't legislation be passed to change this rule?
 
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
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Complainer said:
But can't legislation be passed to change this rule?
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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.
 
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.
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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.
 
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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