Lenihan demands details of when AIB bonus dates changed

MINISTER FOR Finance Brian Lenihan is to write to the board of Allied Irish Banks requesting details of the timeline of events that led to the earlier than usual announcement of bonuses in its capital markets division in 2009.

Mr Lenihan’s letter will cite an article by Irish Times journalist Fintan O’Toole published on Tuesday. The article quotes a source within AIB who described the bonus declaration as “a looting of the bank by management before the Government became involved in the institution”. Bonuses in AIB were usually paid in April, with staff in the capital markets division informed of their individual bonuses in February. However in late 2008, the Government announced its intention to recapitalise AIB in February 2009. Senior managers in AIB’s capital markets division informed staff of bonuses totalling €40 million on January 29th.

AIB said on Tuesday it had revised the bonus procedures policy in its capital markets division in late 2007 to allow for the earlier than usual payment of bonuses in the period 2008-2010. The bank declined to show a copy of the revised policy procedures to The Irish Times on the grounds that it is “commercially sensitive”.

The Department of Finance said yesterday it would not specifically request a copy of the revised bonus policy but it would expect AIB to refer to that document in its letter. It also expects relevant documents to be forwarded to the department as part of the bank’s reply. A spokeswoman said the Minister expected a reply from the bank “as soon as possible”.