ANALYSIS: The Irish Nationwide chief executive received a 12 per cent salary increase this year

AT A time when a tiny minority of bankers are resigning over poor performance and most are taking pay cuts and losing bonuses, the name of one individual jumps out of the report from the Government’s bank remuneration committee – Michael Fingleton.

The chief executive of Irish Nationwide Building Society (INBS) was paid a bonus – specifically “a pre-contracted incentive bonus” for 2008 – of €1 million just weeks after the Government took the unprecedented and hugely risky step of guaranteeing the liabilities of the Irish banking system.

The guarantee exposed the taxpayer to €440 billion worth of risk, but Mr Fingleton still received his “pre-contracted” bonus, which had apparently been agreed early last year.

No bonuses were paid to the top brass at the other five Irish-owned guaranteed institutions for 2008.

Mr Fingleton is a notable exception in the Irish banking industry, which may write off up to €35 billion in loan losses over the next four years (according to Goodbody Stockbrokers) and which has so far received €7 billion in recapitalisation funds from the taxpayer.

Mr Fingleton was also the only chief executive of a guaranteed Irish-owned lender to enjoy a pay rise last year. He received a 12 per cent salary increase this year, to €1 million from €893,000 for 2008.

All told, his pay packet for 2008 – a year of spectacular stress in the Irish banking sector – rose to €2.34 million from €2.31 million the previous year. This made Mr Fingleton the best-paid chief executive in Irish banking last year.

This is his pay for a year when the building society is expected to set aside significantly more in provisions for 2008 to cover losses on a €12 billion loan book, which is heavily exposed to the development sector that is leading to massive write-offs at the other banks.

One benefit not accruing to Mr Fingleton this year is the “other benefits and fees” of €453,240 which he received last year, the Government-appointed Covered Institution Remuneration Oversight Committee (Ciroc) said.

The committee recommended that his salary be cut to €360,000.

Minister for Finance Brian Lenihan is said to be “not impressed” with the €1 million bonus paid to Mr Fingleton, according to department sources.

The department intends to press Mr Fingleton to repay the €1 million, though the INBS boss is likely to drag his heels, claiming that the payment was pre-agreed.

A department spokesman said it would “consider matters brought to its attention (in the Ciroc report) for further investigation and that the Department of Finance is pursuing these issues.”

Fine Gael finance spokesman Richard Bruton said Mr Lenihan had “bottled it” by setting the limit for top bankers at €500,000 when his party wanted a €250,000 cap.

“With confidence in the banks at an all-time low in Ireland and internationally, we need an entirely fresh start,” he said.

Mr Lenihan’s cap will mean a further cut for AIB chief executive Eugene Sheehy from his already truncated salary of €690,000.

The salary for Bank of Ireland’s new chief executive Richie Boucher has not yet been agreed, while the chief executive posts at Anglo Irish Bank and Irish Life Permanent are vacant following the recent controversies.