Written Answers - Banking Sector Regulation

Wednesday, 1 December 2010

Dáil Éireann Debate
Vol. 723 No. 4

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  96.  Deputy Chris Andrews  Information on Chris Andrews  Zoom on Chris Andrews   asked the Minister for Finance  Information on Brian Joseph Lenihan  Zoom on Brian Joseph Lenihan   if pay increases were granted to any staff in Allied Irish Bank, Bank of Ireland or Anglo Irish Bank during 2009 or 2010; if so, the number of increases that were granted and the grade of staff that received wage increases; if wage increases were granted, the criteria under which such increases were granted; the total amount for any such pay increases by institution; if any bonuses were paid during 2009 or 2010 to staff in any of the aforementioned institutions; if so, the number of bonuses that were granted and the grade of staff that received them; if bonuses were granted, the criteria under which they were granted and the total amount for any such bonuses by institution. [45485/10]

Minister for Finance (Deputy Brian Lenihan): Information on Brian Joseph Lenihan  Zoom on Brian Joseph Lenihan  I would point out to the Deputy that the 3 organisations operate in an arms length capacity in relation to operational issues. It is a matter for the respective individual boards and senior management to determine and implement pay policy in their organisations subject to their relevant operating environment. From enquiries made, I am informed by the respective institutions that the position regarding the issues raised by the Deputy in relation to their organisation is as laid out in the appendix following.

Allied Irish Banks (AIB)

General Pay Increases

2009 Total 2010 Total
Grade No. of Staff €m No. of Staff €m
Executives
Managers
Jnr Management 2,479 3.94
Other Staff 6,511 7.03
Total 8,990 10.97 0 0.00

There were no general pay increases awarded in 2009 to executives, managers or to staff in functional pay structures such as IT and Finance in Ireland, Northern Ireland or Great Britain. However both merit increases and incremental pay increases of a contractual nature were paid to both junior management and clerical staff. The average salary increase for staff in the Republic of Ireland in 2009 was 3.2%. This pay increase was awarded after a six month pay pause and following extensive negotiations with the Irish Bank Officials Association and a conciliation process at the Labour Relations Commission regarding AIB’s proposal for a [803]general pay freeze. Pay increases of 1.9% and 3.0% respectively were paid to staff below manager grade in Northern Ireland and Great Britain following conciliation.

Other Pay Increases

In addition to the general pay increases shown in the table above for 2009, €781,000 was awarded to 76 staff reflecting promotions to new or increased roles. In 2010, there were no general pay increases awarded to date to any group of staff. Approximately 300 staff received individual salary increases during the nine months to end September totalling €3.4m largely as a result of market competitive pressures for key skills in areas such as credit or where staff moved to larger roles.

Bonuses (Booked in the Financial Accounts)

2009 Total 2010 Total
Grade No. of Staff €m No. of Staff €m
Executives 62 11.11 2 0.71
Managers 674 30.06 41 3.06
Jnr Management 700 9.20
Other Staff 1,389 4.49 1 0.02
Total 2,825 54.86 44 3.79

€56.3m of the total bonuses of €58.7m paid in 2009 and 2010 relates to performance related bonuses to staff in AIB Capital Markets. These bonuses were awarded for individual and business performance in prior years but deferred and paid in the 2009 and 2010 period.

The awards made in 2009 to staff in AIB Capital Markets in respect of 2008 were deferred and subsequently paid following threatened or initiated legal action:

€17.1m was paid in 2009 to overseas staff on foot of legal action;

€35.5m was paid in 2010 following legal action and a High Court judgement against the Bank. A further €3.7m was paid to staff in AIB Capital Markets in 2010 in respect of deferred bonuses relating to 2006 and 2007 and were in accordance with the individuals’ contractual terms.

The balance of €2.4m was paid to junior management and clerical staff in AIB’s customer contact centres in Ireland, to staff in AIB’s offices in Jersey and the Isle of Man and also included payments in respect of a small number of pre-existing contractual bonuses.

Bank of Ireland (BoI)

General pay increases have not been granted to staff during 2009 and 2010. Nor were any performance related bonuses paid to staff in BoI with respect to the financial years to March 2009 and December 2009. There have been limited instances of promotional increases where a person has been promoted to fill a role at a higher level or grade. For commercial reasons BoI do not disclose the amount of such increases but they state that by their nature they were exceptional, relating to less than 4% of the workforce.

A small number of people at middle management level received payments which reflected either guarantees which were agreed on their joining the Group or deferred payments where the historic performance criteria had been achieved and the payment was deferred over several [804]years. For commercial reasons BoI do not disclose the amount of such payments. The bank advises that it had no legal discretion in these matters.

Anglo Irish Bank

2009

A general salary increase of approx. 5% was paid to staff up to Manager level. Management above this level did not receive salary increases. This increase was agreed in 2008 and was implemented in January 2009. During 2009 there were a small number of internal appointments (13) with associated pay increases in line with enhanced responsibilities. There were ten bonus awards paid during 2009. The breakdown was as follows: nine were contractual entitlements to a deferred portion of a bonus earned in previous years and one was a performance related bonus in respect of year 2008 but implemented for payment in 2009.

2010

No general salary increases was paid to staff in 2010. A number of staff were awarded specific pay increases in line with enhanced job responsibilities and criticality of roles. There were five bonus awards paid during 2010. All of these awards were contractual entitlements to a deferred portion of a bonus earned in previous years. There were no performance related bonuses awarded during 2010.


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