THE DEPARTMENT of Finance is assessing a response from Irish Nationwide to its request that the building society’s chief executive, Michael Fingleton, repay a €1 million bonus paid to him weeks after the Government guarantee for Irish banks was introduced.
A spokesman for the department said the building society had replied to a letter from the department querying the payment of “a pre-contract incentive bonus in relation to 2008” last November, just weeks after the Government guaranteed the financial system.
The department said it received a reply last week and the response was “being considered” and that the issues “would be looked at”.
The department claims that the bonus breaches the guarantee.
The Covered Institutions Remuneration Oversight Committee (Ciroc), which was set up under the guarantee to determine bank executive pay, recommended that no bonuses be paid to executives at the covered institutions for performance in either 2008 or 2009, or for the guarantee’s two-year duration.
The building society has claimed the bonus was agreed earlier last year, before the guarantee was introduced last September.
There was no response from a spokesman for Irish Nationwide.
It is believed that Minister for Finance Brian Lenihan has indicated that he will use his powers to amend the guarantee as it affects Irish Nationwide in an attempt to force the repayment of Mr Fingleton’s bonus.
The Ciroc report into bank executive pay, released last week, showed Mr Fingleton received €2.34 million in total last year, making him the best-paid chief executive of a guaranteed financial institution for 2008.
He received a 12 per cent increase in his salary to €1 million this year from €893,000 in 2008 and €812,000 in 2007.
The report did not outline when the building society agreed to increase his pay.
Ciroc concluded that Irish Nationwide’s chief executive should receive €360,000 a year.
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