IRISH GOVERNMENT STATEMENT ON BANK OF IRELAND BONUSES

     (The following press release from Ireland's Finance Ministry was received 
by e-mail.) 
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 
bonuses. 
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 
payments.   
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 
misleading.  
However, it would appear that bonus payments made to the Senior Executive Team 
were in accordance with the Subscription Agreement governing the 
recapitalisation. 
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 
taxpayer support. 
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.  
ENDS     
Brian Meenan 
Press office 
Department of Finance 
Ph: 6045875  Mob: 0872198857 
email brian.meenan@finance.gov.ie <mailto:brian.meenan@finance.gov.ie>  
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