Bank chief’s deal detached from reality

THERE seems to be something crudely detached from the prevailing realities of life in Ireland and brazenly indifferent to public policy about the decision by the court of the Bank of Ireland (BoI) with respect to the recently disclosed pension arrangements for chief executive Richie Boucher.

The BoI staff pension scheme reports a deficit of more than €1.6bn. The group lost in excess of €1.8bn for the nine months of 2009 since the appointment of Mr Boucher as chief executive. It is disposing of businesses that it can no longer sustain.

BoI cannot afford such extravagant and grandiose pension arrangements, nor can the Irish taxpayer who is called on to compensate for the consequences of a diabolical trading performance.

The proposal to provide a defined benefit pension to Mr Boucher, equivalent to 59% of a €690,000 salary from the age of 55, after a mere four years service in the role of chief executive, does not reflect the views of the covered institutions remuneration oversight committee published on February 27, 2009, two days after Mr Boucher’s appointment as chief executive.

They stressed that pensions for senior bank executives ought to be similar to those applicable to the generality of bank staff. They also criticised the practice of top management of banks making little or no personal contribution to their pensions and advocated that there ought to be a more appropriate balance between employer and employee pension contributions.

Mr Boucher’s proposed pension is equivalent to more than twice the salary of the Minister for Finance and it would be greatly in excess of the salaries of other top-level office-holders whose role is of systemic importance. Most Irish people will not be able to retire until age 68, if they are lucky enough to have employment and avoid emigration. How can this deal be tolerated in a business that is chronically dependent on public support and which is contracting in scale and complexity? The governor of BoI thanks the taxpayers for their support of the financial system. His words ought to be supplemented by deeds that demonstrate real leadership and a recognition and understanding that Irish society cannot be expected to tolerate such extravagant, audacious and unaffordable privilege.

Myles Duffy

Bellevue Ave

Glenageary

Co Dublin