THE GOVERNMENT has given approval to Bank of Ireland to pay almost €320,000 in special payments to professional staff working for it as contractors on issues relating to Nama.
The Department of Finance described the awards as “retention payments” that were being made to counter attempts by other institutions “to poach these highly specialised staff”.
It said on average each of the contractors would receive €9,300 under the move approved last week. In total, €316,000 is expected to be paid out. The department said 13 of the 34 contractors involved were based overseas. Some sources suggested it was these personnel who were considered more likely to be poached.
However, the department said that the advice was that all the contractors should be treated equally in relation to the payments.
“Given the average cost of these payments is €9,300, the potential cost of losing litigation far exceeds the cost of making these payments and it was adjudged as more prudent that the payments be made.”
It is understood many of the contractors are working on due diligence exercises for the bank.
Bank of Ireland declined to comment on the issue. The bank was at the centre of a major controversy earlier this year when a Department of Finance report found it had repeatedly misled former minister for finance Brian Lenihan by insisting that no performance-related bonuses had been paid to its senior management.
In fact, more than €66 million has been paid in bonuses to staff from September 2008 to December 2010, the report states.
Separately, the Department of Finance has asked the other main financial institutions for details of discretionary bonus payments, contractual payments, retention payments and commission-type payments made to staff between September 2008 and 2010.
Minister for Finance Michael Noonan told Fine Gael TD Andrew Doyle in an answer to a parliamentary question last week that he had sought a review of pay in institutions covered by the guarantee.
“The Deputy may wish to note in relation to the matter of remuneration at the covered institutions (including Anglo Irish Bank) that the National Treasury Management Agency, on behalf of my department, requested the chief executive officers of each of the covered institutions to review remuneration policy and practices in their institutions.”
“The institutions have also been asked to consider measures that could be undertaken to align staff expectations with regard to benefits/remuneration to the changed economic environment and the financial circumstances of the banks.”
The Minister also said more than 200 staff in the Civil Service, Garda Síochána and the Defence forces received bonus payments in 2007 and 2008 under a performance award scheme.
“In 2007 a total of 205 individuals received awards under this scheme in respect of 2006, while 221 received awards in 2008 in respect of 2007. While the introduction of performance-related schemes in the commercial and non-commercial State sponsored bodies sector require the approval of the Minister for Finance, once such approval has been given, the operation of such schemes is a matter for the relevant boards and parent departments.”
Ministers have written to various State companies in recent weeks expressing concern about the payment of bonuses in the current economic climate.