Brian Lenihan Jnr (Dublin West, Fianna Fail)

I received the report of the covered institutions remuneration oversight committee, CIROC, on 3 March. It was common knowledge that remuneration levels for senior bankers based on salary, bonus, pension and other payments were high long before the Government guarantee. Some of the relevant material was in the public domain. The CIROC was established as part of the guarantee scheme for the covered institutions and its report has provided additional specific details in regard to remuneration levels in the banks. The committee reported that with the exception of the Irish Nationwide Building Society, where the chief executive officer was paid a prearranged incentive bonus of €1 million for 2008, no bonuses have been or will be paid to chief executive officers and senior executive management teams in respect of their performances in 2008-2009.

Recent detailed disclosures in regard to the remuneration of the chief executive officer of the Irish Nationwide Building Society require investigation. I wrote to the acting chairman of the board on 12 March stating that I considered the payment of the bonus to be potentially a breach of the guarantee scheme and seeking an immediate reply as to what the board intended to do. While the reply to that letter indicated that the payment concerned was contractually committed before the Government guarantee, I have asked that the two directors appointed by the board nominated by me should review all these issues and that I should receive a report within one month. I have also requested the board to brief me next week on its plans for the society, including the review of management and board personnel.

Under the provisions of the guarantee scheme, two non-executive directors nominated by me were appointed to each of the covered institutions. In nationalising Anglo Irish Bank, I have ensured an overhaul of the board. Also, under the terms agreed on the recapitalisation of Allied Irish Bank and Bank of Ireland I can appoint up to 25% of the board members subject to the finalisation of the recapitalisation proposals announced in February. As the Deputy will be aware, there have been changes of chairperson and CEO in Anglo Irish Bank, Bank of Ireland, Irish Life & Permanent and EBS.

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