Soden received up to €3m in B of I severance package

Bank of Ireland has paid a severance payment of up to €3 million to its former chief executive Michael Soden, a year after he left the bank when it emerged that he had accessed an "adult" website in his office.

After a long negotiation, the agreement was finalised only in recent weeks. However, the precise details of the package will not be set out until the bank publishes its annual report next week.

Details about the deal will become public as Mr Soden's successor, Brian Goggin, seeks 2,100 redundancies from Bank of Ireland, a demand that has angered its staff and unions.

The deal with Mr Soden is believed to include a cash payment and a top-up contribution to his pension fund. The cash payment is believed to include a buyout from an incentive programme in the bank.

Bank of Ireland's spokesman declined to comment when asked about the package.

Mr Soden was only two years at Bank of Ireland. He resigned a year ago yesterday after bank governor Laurence Crowley raised with him his use of the website, which Mr Soden said he had strayed onto.

The former chief executive received a remuneration package worth €1.6 million in his final year as chief executive.

The most recent annual report shows that he was paid a salary of €900,000 in the 12 months to the end of March 2004 and received a €554,000 performance-related bonus. He received a further €16,000 in other remuneration, €32,000 in benefits and €92,000 in pension contributions.

Mr Soden was also granted 200,000 share options, bringing to 461,000 the options he held over company shares before his departure. These options could be exercised on dates between November 2004 and June 2013 at prices ranging from €10.54 to €12.50. The bank's shares closed on Friday at €12.45. In the previous year, he received a package worth €1.3 million.

Mr Soden was a controversial figure at the bank from the outset of his tenure there. He surprised investors when he first arrived at the bank by suggesting that it should merge with AIB. The idea never took off.

He later led an unsuccessful attempt to buy Abbey National and then undertook joint ventures with companies such as the UK post office instead of chasing big deals.

In his resignation statement, Mr Soden said he had made it a central part of his tenure as group chief executive to set the highest standards of integrity and behaviour and to do so in an environment of accountability, transparency and openness.

At the time, he said his departure was self-inflicted. "It was a silly incident. It was unfortunate and I am paying a very high price for it. I regret it enormously. It was foolish."