18,000 staff could see larger financial benefits and enjoy greater transparency of profit-sharing scheme

An independent tribunal has recommended a review of Bank of Ireland's share option plan for its 18,000 staff that could see them earn larger financial benefits and make the scheme more transparent.

The tribunal, which was chaired by the chief executive of the Labour Relations Commission, Mr Kieran Mulvey, noted the concerns raised by the Irish Bank Officials Association (IBOA) about the scheme. The IBOA had questioned the transparency and was critical of the lack of general understanding of how the scheme operated as well as the limitation, or cap, on the amount which can be paid each year, particularly when compared with some of the bank's main competitors.

"This tribunal recommends that the bank should specifically take on board the IBOA's concerns in this area and recommends that both the bank and the IBOA conduct an early joint review of the operation of this scheme." It further directed the bank and the IBOA should also agree a basis for an increased allocation to be made to the scheme to apply from April 1st, 2003.

The tribunal added that if agreement was not reached by September 15th, 2003, the parties should refer the disputed issues back to this forum for a final recommendation.

IBOA general secretary Mr Larry Broderick welcomed the recommendation, describing it as "a ground-breaking achievement" for the trade union.

"At a time when banks are making record profits and their senior management are rewarding themselves with massive pay increases and generous share options, it is only just and equitable that IBOA members who make the major contribution to the success of the group should share in that success. This recommendation delivers on profit-sharing for our members," he said yesterday.

A spokesman for Bank of Ireland said the bank was "comfortable" with the outcome and did not foresee any difficulties in arranging future discussions with the IBOA on the matter.

The Employee Stock Issue Scheme is one of a number of performance-based remuneration programmes offered to its more than 18,000 employees. Under this scheme, the bank's directors can set aside part of the group's pre-tax profits to be allocated to its trustees who can acquire Bank of Ireland shares on behalf of employees.

The amount set aside is related to the growth in Bank of Ireland's earnings per share and how that compares with that achieved by other Irish and British financial institutions in the same period. Employees can receive a maximum of 4 per cent of their salary through this scheme. Since its inception, employees have up to 3.5 per cent of their salary in this form. Last year, Bank of Ireland allocated 2 per cent of staff salaries to the scheme at a cost of €8 million.

The IBOA has been pursuing this claim for the past two and a half years following the implementation of the group transformation programme at Bank of Ireland which has seen more than 1,000 staff leave the company and huge cost savings being generated across the business. The IBOA believes some of the gains being yielded through this process should be shared with employees.

The IBOA's executive committee will meet this week to consider the recommendations and will be seeking to schedule some meetings with the bank.