(The following press release from Ireland's Finance Ministry was received
Payment of Bonuses in Bank of Ireland
Last December, the media reported that Bank of Ireland had paid a substantial
bonus last year to a senior manager.
The Bank had repeatedly told the Department of Finance that no performance
related bonuses had been paid to senior management. The Minister relied on this
incorrect information in his replies to Parliamentary Questions about bank
The Minister ordered an investigation of bonus payments made by Bank of Ireland
since the introduction of the State Guarantee in September 2008. The attached
report sets out the findings of this investigation.
* Senior Executive Team members in Bank of Ireland were paid previously
contracted bonuses amounting to €4.3 million in the period.
* The bank says it is due to pay contractual bonuses of €0.6 million to
Senior Executive Team members in 2011 and a further €0.2 million in 2012.
* The Bank has advised that payments of up to circa €11 million to up
to 250 staff may be payable by the Group in 2011 under certain bonuses
categories where payment has been deferred or with respect to retention
The Banks says these figures remain under review and have been revised
downward. The Government recently introduced a 90% tax on bank bonuses in the
Finance Bill which will apply to any future bonuses paid by Bank of Ireland or
any institution while in receipt of State support. The report recommends that
any future support for Bank of Ireland be conditional on compliance with
Government policy. The conditions that may attach to any potential future
capital injections to the bank is a matter for the incoming Government.
The Report published today confirms that misleading information was provided to
the Department for use in replies to Parliamentary Questions. Arising from
this error, it is recommended that in future, material provided to the
Department for use in Parliamentary replies should be personally authorised at
senior executive level within the bank.
The information supplied by the bank for the diligence report carried out on
behalf of the Department prior to recapitalisation in 2009 was incomplete and
However, it would appear that bonus payments made to the Senior Executive Team
were in accordance with the Subscription Agreement governing the
The Minister and the Department are dissatisfied with the approach of the bank
to the overall investigation process and its use of a definition of performance
related bonus which is at odds with normal usage. Such restrictive and uncommon
interpretations are misleading and are inappropriate from a bank in receipt of
The Minister has made it clear to the bank at the most senior level that the
number of discrepancies which have come to light in the figures provided by the
bank and the multiple points at which inaccurate, incomplete and/or misleading
information was provided, particularly when the information was intended for
Dail Eireann, is unacceptable.
The investigation has raised serious issues about the Bank’s disclosures to the
Department and its agents and the quality of its record keeping. There is
considerable public anger about the level of support that has been required to
protect our banking system. Every institution in receipt of State support has
obligations to the Government, the Oireachtas and the citizens to be forthright
and transparent in their actions, particularly relating to remuneration.
The Bank must seriously consider the implications of this report for the future
conduct of its business and its remuneration policy. The Minister has accepted
an offer by the Bank to pay EU2 million to the Exchequer in recompense for
misleading the Minister and the Oireachtas about this matter.
Department of Finance
Ph: 6045875 Mob: 0872198857
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