Lenihan may use law to block bank bonuses

FINANCE Minister Brian Lenihan will use legislation if necessary to prevent executives of banks covered by the state guarantee from receiving bonuses in the immediate future.

As pressure grew on Irish Nationwide chief executive Michael Fingleton to hand back a €1 million bonus paid after the guarantee scheme was introduced, the Department of Finance confirmed that no more bonuses will be paid.

Irish Nationwide was one of the banks covered by the scheme which came into operation last September. Mr Fingleton received the bonus in November.

The Green Party called on Mr Fingleton to resign immediately and said he had shown contempt for all Irish citizens.

Finance spokesman Senator Dan Boyle said: “If an institution is benefiting from the guarantee scheme, I don’t think that can be guaranteed in itself if the institution is paying executives over above the odds and giving them packages that can’t be justified.”

A spokesperson for the Department of Finance said there is no intention to introduce an Obama-style tax of 90% on bonuses of banking executives in institutions covered by a guarantee.

But he said the Government is already adopting the recommendations of the recent Covered Institutions Remuneration Oversight Committee (Ciroc) report, that no bonuses should be paid in the immediate future. It has emerged that a potential successor for Mr Fingleton, who is expected to retire this year, has decided not to take over the role following the publication of the Ciroc report which recommended that the head of Irish Nationwide should be paid no more than €360,000 a year.

The department spokesperson said the minister “will bring in legislation, if necessary, to force the banks to bring in these recommendations”.

Mr Lenihan will meet the board of the building society later this week.

It is expected he will also raise reports that Mr Fingleton was the sole beneficiary of a €27.6m settlement by the society of a defined benefit pension last year.

Fine Gael spokesperson on finance Richard Bruton said the bonus was outrageous: “At a time when financial institutions have had to turn to the state for support and at a time when serious errors have been made in the running of financial institutions that have jeopardised the whole economy, the notion that huge payments are paid out to those executives who have been involved is an affront to people,” he said.


Last week, en route to La Gomera in the Canary Islands, I decide to stop off in Tenerife and take the 1.2km cable car ride to the top of Mount Teide, 3,660m above sea level. Cable cars are invariably an exciting way to travel.Dursey Island is a special place because of its remoteness

It can be considered offensive by some but generally the word ‘tinker’ is not considered rude says the Traveller’s advocacy group Pavee Point. Over time the term became synonymous with ‘Traveller’ and it is this which is current today.The Islands of Ireland: Tinkering with the past on Tinker’s Island in West Cork

Dr Naomi Lavelle explores some questions about walking upside-downAppliance of Science: Could humans copy insects' ability to walk upside-down?

Emer Corridan is the general manager at the award-winning four-star, Cahernane House Hotel in Killarney, Co. Kerry.You've Been Served: Emer Corridan, general manager at Cahernane House, Killarney

More From The Irish Examiner