Scandal-hit AIB’s chiefs pocket 21% pay hike

THE four executive directors of AIB received a 21% hike in salaries and bonuses last year to over €4 million, according to the bank’s annual report for 2004.

The bumper payments come less than a year after a series of overcharging and offshore tax-dodging scandals rocked the bank.

Of the €34m set aside to cover the overcharging refunds, only €17m has so far been reclaimed.

Outgoing chief executive Michael Buckley, who retires this year, received a basic salary of €775,000, a rise of €115,000, and a bonus of €360,000.

His bonus payment was down €190,000 on the previous year, but the bank said this was because Mr Buckley received a special €250,000 payment in 2003 to reflect his work in the sale of its US arm Allfirst to M&T Bank Corporation.

The bank also pumped €210,000 into his pension fund and he received other fees of €100,000.

Colm Doherty, who heads the bank’s capital markets arm, was the next highest-paid director, earning a total of €958,000.

This was a 46% rise on what Mr Doherty was paid in 2003. AIB Capital Markets saw its profits rise by 30% last year. Mr Doherty’s package consisted of a basic salary of €418,000, a bonus of €340,000, pension contributions of €109,000 and other benefits of €91,000.

Group finance director Gary Kennedy got a €59,000 rise in his overall remuneration package to €844,000.

Aidan McKeon, who runs AIB’s British operations, received a total of €834,000 in 2004, a 54% increase from 2003.

The bank’s chairman, Dermot Gleeson, a former Attorney General, was paid €285,000 in fees for the part-time role, a hike of €68,000.

The bank paid out €989,000 in fees to its 12 non-executive directors.

In the annual report, Mr Gleeson again apologised to customers who were affected by the series of scandals that rocked the bank last summer. He said that all outstanding regulatory matters have now been resolved. Mr Gleeson said the task of refunding customers was progressing very slowly.

Though AIB has attempted to draw a line over the year of scandals, the overcharging fiasco will return to haunt the bank again next week.

Séamus Sheerin, the head of its Strategic Development Unit (the section responsible for implementing price changes), will return to the High Court on Monday to prevent the bank from sacking him.

It also emerged in the report that AIB has extended indemnity cover to Mr Buckley and Mr Doherty to the tune of €10m. This is to cover any potential legal claims taken against the pair from their time at Govett Investment Management (now called AIB Investment Management) in relation to the management of split capital trusts. The report did not disclose if they are facing any claims.

A number of financial firms in Britain that operated split cap products are the subject of legal actions.

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