THE GOVERNMENT confirmed yesterday that it was not willing to breach the €500,000 maximum salary guideline for the banks in the case of the appointment of the new head of AIB, Colm Doherty.
Arising out of an
Irish Times
report that Mr Doherty was to be appointed AIB managing director at a salary expected to be about €633,000, the Minister was asked on RTÉ radio whether his instruction to the banks regarding a €500,000 overall salary cap for chief executives still stood.
"Absolutely," Mr Lenihan told interviewer Sean O'Rourke on News at One, adding that the Government was not willing to breach the guideline in this instance.
"The position is that I received a request from the Allied Irish Bank . . . it arrived in my department at seven o'clock yesterday evening," the Minister said. "It was mentioned to me, I think, at about half-past eight, and that was a request to exceed the guideline in a particular case.
"I considered the matter, made no decision on the matter, contrary to all the reports about 'coaches-and-four' being driven through the Department of Finance and other State agencies.
"And naturally, as any Minister for Finance would do in the circumstances, I brought it to my colleagues in Government this morning. I have just left the Cabinet meeting, and I can tell you that the Government are not willing to break with the established guideline in this case."
He could not account for this matter being in the public domain before the Cabinet meeting: "But I can tell you that there is a clear position as far as the Government is concerned, as far as I'm concerned; the guideline has not been breached in this case."
He was "very disappointed" to hear Opposition spokespersons "making various comments about who they would select as the chief executive of the AIB".
Pointing out that one of the public interest directors at AIB was former tánaiste and Labour leader Dick Spring, the Minister said: "He has contacted me in recent weeks and made clear to me that they have done an exhaustive interview of various candidates and, to date, have not been able to establish an external candidate for appointment to AIB."
He added: "I don't know Mr Doherty. I did express a preference to Allied Irish to have an external appointment. I'm satisfied from looking through the files and from the work Dick Spring did on this that it wasn't possible to obtain an external appointment."
Responding to a question from Fine Gael leader Enda Kenny in the Dáil yesterday, Taoiseach Brian Cowen said: "The Government have made clear what the arrangements are in relation to our position regarding the filling of the position of CEO, in line with decisions that we communicated in March.
"That's the position. And the board brought forward a name which they believe to be the person best qualified, given all the choices they had, to run the bank, based on those who were available to do so."
He said an issue came into the public domain yesterday before Mr Lenihan had "been given an opportunity to give proper consideration to it. He has now communicated to the bank the position that he holds, supported by the Government, and we now await developments in that respect."
Earlier, Labour deputy leader Joan Burton said: "AIB's determination to appoint an insider to the top position is a reflection of the fact that little has changed at the top in the banks and that, despite the enormous damage to the economy and cost to the taxpayer, they want to return to business as usual as quickly as possible."
Fine Gael spokesman on enterprise, Leo Varadkar said: "I note that Mr Lenihan claims he has not approved these arrangements.However, he has accommodated every demand from the banks to date, from the bank guarantee onwards. Brian Lenihan is the bankers' man in Leinster House. He must now refuse the appointment and the salary level."
