Lenihan allows AIB executives collect €40m bonuses

The Government will not impose a super-tax on the €40m in bonuses set to be paid to Allied Irish Bank executives, Minister for Finance Brian Lenihan said tonight.

He instead announced a 90% tax on any future bank bonuses at institutions covered by the bank guarantee or capitalised by the taxpayer.

"As far as the future is concerned, I do propose to introduce an amendment to the finance bill to put this matter beyond any doubt and provide a high rate, a 90% rate of charge on any bankers’ bonuses," said Lenihan.

The Opposition branded the sudden announcement of the levy an attempt to appease vulnerable people hit hardest by the Budget 2011 welfare cuts.

Fine Gael leader Enda Kenny earlier referred to the bonuses as 'scandalous'.

Executive Chairman of AIB David Hodgkinson said that the bonuses reflect the past and not the future of the bank.

He wrote to staff today telling them the bank will have a different pay culture in the future that reflects the economic climate and support the taxpayer has provided.

AIB said that it has no choice but to pay out these bonuses of almost €17,000 each to 2,400 workers after some of them took legal action.

They relate to work done by staff before the bank guarantee in September 2008 and were in their contracts.

Lenihan told the Dáil this evening that future bonuses are legislated against since the guarantee and will not be paid.