AIB to pay €40m in bonuses to staff this year

STRUGGLING Allied Irish Bank is set to dole out almost €40 million in bonuses this month despite being on the brink of another bailout from the Government.

According to a number of reports last night, the bank is set to pay all staff contractually entitled to a deferred 2008 bonus in their December pay packet, at an estimated cost of €40m.

The payout is a result of trader John Foy’s successful legal action against the bank, which resulted in it having to pay him a deferred bonus of €161,000. As many as 90 employees in AIB’s capital markets division have issued similar legal proceedings against the bank in the courts.

AIB had been withheld from making the payments under the Government’s bank guarantee scheme. A spokesperson for AIB was unavailable for comment last night

The payout is likely to cause widespread public anger given as it comes on the back of the most austere budget in the history of the state.

In a recent parliamentary question, Finance Minister Brian Lenihan confirmed that the payments had to be made on foot of the legal action.

“The awards made in 2009 to staff in AIB Capital Markets in respect of 2008 were deferred and subsequently paid following threatened or initiated legal action,” he said.

Some €35.5m was paid following legal action and the High Court judgment against the bank, while a further €3.7m was paid to staff in AIB’s capital markets division.

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