Noonan: Bankers 'still on fat cat deals'

More senior executives at bailed-out banks are in line for controversial multimillion-euro severance packages.

Finance Minister Michael Noonan warned a number of top bankers are sitting on fat-cat contracts signed off by his predecessor and are due massive lump sums on retirement.

He confirmed Colm Doherty, the former managing director of Allied Irish Banks (AIB), secured a €3m plus package when he stepped down last November.

“The previous government shouldn’t have allowed this situation to develop,” said Mr Noonan.

“But Mr Doherty is contractually legally entitled to what he got because of the decisions made by the previous government.

“We can make sure that the new contracts don’t have the same generous provisions that the old ones have but there are still a number of old contracts running and there are still people in the employ of the banks who have contractual and legal rights if they were to retire in the near future.”

AIB, once Ireland’s biggest bank, last week announced losses of €10.4bn in 2010 and announced plans to axe 2000 staff by the end of next year.

The lender is costing Irish citizens €13bn in bailouts.

It is understood he received a salary of €432,000 when he was forced out of AIB at the direction of then finance minister Brian Lenihan in November. He also received a termination payment of €707,000 in lieu of a year’s notice. On top of that the banker was given about €2m cash in lieu of pension contributions.

Mr Noonan said he had to deal with the possibility it could happen again.

“We can only deal with what happens on our watch and I can assure you new people being hired in to the banks in senior management positions will have less advantageous contracts and less advantageous remuneration packages,” he added.

Meanwhile Gerry Adams, Sinn Féin president, demanded the Government intervenes and prevent this payment.

He added: “They have no problem bringing in legislation to support the mugging of ordinary citizens, the universal social charge. They have no problem bringing other laws and regulations.

“They should intervene and stop this man from taking this obscene amount of money.”

Later, Mr Noonan said there would be a referendum this year to seek more powers for parliamentary committees to call bankers and force them to answer.

He also said there would be a review of the bank boards and any members in place since before 2008 would be forced to go.

Mr Noonan said justice had not only to be done, but to be seen to be done.

“I think it would be proper that those who are personally culpable would be brought before an Oireachtas Committee and would answer for what they have done or indeed for their omissions,” the minister said.