Cowen accused of caving in over AIB appointment

By Shaun Connolly, Political Correspondent

Thursday, November 19, 2009

TAOISEACH Brian Cowen was last night accused of caving in to AIB by allowing an insider to head the bank and put in place a "worrying" overlap of roles.

Opposition parties accused ministers of helping manufacture a row over pay in a failed attempt to hide the fact they had capitulated to bank bosses on there structuring.

Despite previous Government demands for an outsider to be in charge of the crisis hit bank after €3.5 billion of taxpayers’ money was pumped into it, Mr Cowen confirmed that AIB executive Colm Doherty would be promoted to managing director of the bank, but would see his pay fall from €633,000 a year to the €500,000 cap for new appointments.

And as part of the deal, chairman Dan O’Connor would become executive chairman, encompassing the two roles of chairman and chief executive.

Fine Gael’s enterprise spokesman Leo Varadkar described it as "victory for the fat cats".

"This isn’t regime change, it’s business as usual for the banks. Brian Lenihan is working for the banks, not for us. The chief executive and chairman will be the same person. This is corporate governance at its worst. The fat cats have won again," he said.

Labour Finance spokes-person Joan Burton echoed the criticism.

"The combination of the two roles is worrying as this kind of governance structure has a very unhappy history in Ireland, you just have to look at Anglo Irish Bank to see that. Mr Lenihan has caved in completely, the banks are in charge, not the Government," Ms Burton said as she claimed ministers had hyped up the row over pay to try and appear tough and obscure the retreat on restructuring.

Mr Lenihan turned down a bid by AIB for Mr Doherty to keep his current salary after leaks saw the issueescalate into a highly public row.

Chairman of AIB’s remuneration committee Sean O’Driscoll denied Mr Doherty’s salary would be beefed up with a bonus package and insisted the bank had not tried to "bounce" the Government into giving in to itsdemands.

"The directors of AIB are not in the business of eyeballing the Government, or as one person said, giving one finger to the taxpayer and one finger to the Government," he told RTÉ.

Government-appointed AIB director and former Labour leader Dick Spring said he backed the changes.

This story appeared in the printed version of the Irish Examiner Thursday, November 19, 2009