Nationwide staff pay-outs opposed

DEMUTUALISATION campaigners at the Irish Nationwide are opposed to staff being given a large chunk of the proceeds of any sale of the building society.

Brendan Burgess and Shane Hogan, who have led a campaign for some years to demutualise the society and to make its lending rates more transparent, said any proposal that staff would be given a 10%-15% stake (similar to the sale of the State banks ICC and ACC) in the society in the event of a sale was wrong and would dilute windfall gains for the society’s members.

Mr Burgess said he was not opposed to any employee of the society getting a share of the spoils but it must be in line with that received by members.

He said he was also against a lump sum being set aside for the society’s veteran managing director, Michael Fingleton.

Mr Burgess is seeking election to the Irish Nationwide’s board at its annual general meeting later this month. He is looking to unseat Michael Walsh, the society’s chairman and head of Dermot Desmond’s International Investment & Underwriting.

Mr Burgess said it was an uphill battle to get elected and he wanted members to back his bid as they needed someone on the board to look after their interests.

“The key issue is that Irish Nationwide needs an independent director because it is a very small board and needs someone to speak out for ordinary members,” Mr Burgess said yesterday.

“We don’t want to see a large pay-off for management and especially Michael Fingleton.”

At last year’s AGM, motions put forward by Mr Burgess and Mr Hogan secured the backing of nearly 20% of members and they said they were hopeful of exceeding this figure in the race for the board seat.

His bid was given the backing yesterday of Eddie Hobbs, the financial spokesman of the Consumers’ Association of Ireland.

Mr Hobbs said given the clamour about Irish Nationwide’s lending rate in the past couple of years, the society needed someone to represent consumers’ interests on the board.

Mr Burgess welcomed Irish Nationwide’s commitment to start the demutualisation process by seeking members’ approval in principle for conversion.

However, he said that a resolution put forward by Mr Hogan that the conversion should be done by year end was more appropriate.

Legislation paving the way for the Irish Nationwide to convert is being drafted by the Department of the Environment and is due to be published soon.

Irish Nationwide said it is in favour of a sale to another financial institution when demutualisation is completed.

When this happens it could mean windfall gains of E7,000 for each of its members. The society is valued at around E1 billion.