AIB plans to ask shareholders for approval at its annual general meeting (agm) for a plan to buy out thousands of legacy shareholders with tiny holdings after their stakes were severely diluted by its crisis-era bailouts.
The bank has sought, in a circular on April 30th ahead of the meeting, the authority to give shareholders who own 50 or fewer AIB shares the opportunity to sell their shares back to the company at a 5 per cent premium to the market price, without incurring any stock broking fees.
The planned so-called odd-lot offer follows an exercise in 2024 in which it offered holders of 20 or fewer shares a chance to be bought out.
Before the 2024 offer almost 67,000 – or 89 per cent – of AIB’s approximate 75,000 registered shareholders at the time held 20 or fewer shares. However, they only owned 0.01 per cent of the company between them, following the bank’s bailout during the financial crisis, in which taxpayers injected a total of €20.8 billion into the lender.
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Following the 2024 offer, the number of shareholders was reduced by 60,055, AIB said in the circular. Of the 14,360 shareholders on the share register today, approximately 11,453 hold 50 or fewer stock in the bank. PTSB also carried out an odd-lot offer in 2024.
“The directors believe that an Odd-lot Offer would be to the benefit of shareholders as a whole as it will lower the company’s cost base and will facilitate a reduction in the number of shareholders in the company in an equitable manner,” the AIB circular said.
The bank also plans to put its new executive remuneration plan before shareholders at the agm, following the lifting of restrictions on basic pay at both AIB and PTSB after the Government sold its remaining shares in the former last summer.
Chief executive Colin Hunt’s annual salary was immediately hiked to €795,000 from €500,000, effective from last August, before being increased again in January, to €1.35 million to “to be much more closely aligned to market norms”, AIB said in its annual report.
AIB also plans to use fixed share awards – with no performance conditions attached – to get around an ongoing ban on bonuses above €20,000 across Irish banks. These will be set at a maximum of 100 per cent of salary.
Reaching a 100 per cent-of-salary shares award would push Hunt’s remuneration to €2.7 million, 5.4 times his pay level for 2024.
The circular was expected to contain more details on whether executive fixed share allowance would ratchet up to 100 per cent on a phased basis, like Bank of Ireland when it introduced such a programme a few years ago. However, the document did not give such detail.
