Daniel McConnell: Ban on bank bonuses for AIB top brass effectively ended

Finance Minister Paschal Donohoe has been sharply criticised for 'opening the door' to bonuses under the terms of the bank's takeover of Goodbody Stockbrokers

Finance Minister Paschal Donohoe has allowed  Goodbody staff to remain exempt from the bankers' bonus levy and given leave for senior AIB staff to 'transfer' over to the stockbroking firm in the coming years. Picture: Moya Nolan

Finance Minister Paschal Donohoe has effectively ended the ban on bank bonuses for elite staff in AIB, as part of its takeover of stockbroking firm Goodbody.

As well as allowing the Goodbody staff to remain exempt from the bankers' bonus levy, he, as the majority shareholder, has given leave for senior AIB staff to “transfer” over to the stockbroking firm in the coming years.

This mechanism has been sharply criticised by some within his own Cabinet and the opposition for “opening the door” to bonuses again in the bank, which was bailed out to the tune of €32bn by the taxpayer.

Mr Donohoe announced that in order to achieve “synergies”, 20 employees may transfer from AIB to Goodbody before the end of this year. 

A further 10 will be allowed to transfer over the following year and no more than five people a year after that. There would be no movement of staff until regulatory approval is granted, he said.

Ministerial sources told the Irish Examiner that Mr Donohoe did not bring any memorandum to Cabinet on Tuesday about his decision to allow AIB staff transfer over but merely “slipped it in” during an oral briefing on various banking issues.

Sinn Féin finance spokesman Pearse Doherty said despite AIB buying 100% of Goodbody from its existing shareholders, Goodbody employees will be able to dodge the banker bonus levy that has been in place at the bailed-out banks since 2011.

“This is unacceptable and is further evidence that this Government is light on financial regulation and accountability. AIB will own Goodbody Stockbrokers in its entirety. The levy on banker bonuses should apply to all parts of AIB,” he said.

Labour’s Ged Nash said the decision to allow AIB to pay bonuses to staff at Goodbody is unacceptable and that it was the first step towards the full return of bonuses.