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

Bronte said:
Don't they gamble with other people's money knowing they will never lose?
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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.
 
I think that if the Banks were in the same " state " as our semi states then we should sink to our knees in thanks.
 
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.
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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?
 
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. .
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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?
 
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?
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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.
 
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.
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So its ok for us to borrow money to pay bonuses in the public and semi state sector?
 
Sunny said:
So its ok for us to borrow money to pay bonuses in the public and semi state sector?
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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.
 
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.
 
Knowing the bank was insolvent and State aid was forthcoming, AIB executives rushed through awards and unilaterally created binding contracts, writes FINTAN O'TOOLE
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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”.
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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.
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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
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Today's article:
[broken link removed]

Marion
 
Bronte said:
Hedging, isn't that a type of 'investment'?
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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.
 
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.
 
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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