The devil is always in the detail with Irish Nationwide
Former Irish Nationwide chief executive Michael Fingleton felt in very comfortable territory swatting back questions at the banking inquiry about his €27m pension pot. His pension is immaterial to the €5.4bn cost of the society's collapse but is instructive about how the society operated.
Fingleton rammed home the point that while he received a €27m pension pot from the society when it was transferred to him in 2007, the net cost to the mortgage lender was actually only €3m.
Fingleton bragged that because he had managed it himself, and invested it wisely, he had saved the society millions. Some commentators even went as far as joking that perhaps Fingleton should be managing all our pensions, based on this performance.
As with many things about Michael Fingleton, the devil is in the detail. Fingleton's pension entitled him to two thirds of his terminal or final salary on retirement. But in 1997 his pension scheme was souped up to include bonus payments in the calculation of final salary.
The average amount of Fingleton's performance bonus over the three years preceding his retirement would contribute to the amount of pension he would receive every year. It was like getting part of your bonus paid again every year after you retired.
In the three years up to 2007, when he took the pension out of the society, his remuneration package went up by 13pc, 24pc and 35pc. He earned bonuses of €305,000, €500,000 and €1m between 2004, 2005 and 2006. This boosted his annual pension payments to €890,000.
If his pension scheme had not been changed in the 1990s to include bonuses, his annual pension would have been just over half that amount. That amendment alone was worth over €12m to Fingleton.
Fingleton was financially incentivised to grow the society's profits in the three years up to 2007 because it would boost his bonus, which would boost the value of his pension every year for the rest of his life.
This was a completely unsatisfactory system for somebody running a bank and one that could seriously reward short-term lending excess. It did.
Fingleton was paid €11m in remuneration between 2003 and 2008. He chose to transfer his pension pot out of the society in 2007, which meant it was his to spend, lose or gain from. If he hadn't done that, the fund within the bust building society would have been responsible for paying him €890,000 per year as a pension.
Fingleton invested the pension money well between 1997 and 2007. But he also got lucky. By 2007, the year he transferred it out of the society, he had stuck over 80pc of it into the stock market. This was high risk stuff for a pension fund.
As of January 2007 he had bet the house on just three stocks, AIB (€12m), Bank of Ireland (€6.8m) and Irish Life & Permanent (€1.3m). Strangely, Anglo Irish Bank was not on the list, despite it being the best performing stock. Did he not like the look of its business model?
If he didn't sell down those shares, by April 2009, his pension fund would have been down to €4m.
For Michael Fingleton everybody seems to be wrong about Irish Nationwide except him. People who have written about him and the society are "80pc wrong, 10pc is questionable and 10pc is accurate."
Accountancy firms Deloitte and KPMG, which conducted detailed reports into corporate governance failings and lending practices are wrong. Nama got its valuations wrong. Peter Nyberg and his banking commission of inquiry also got it wrong.
When it comes to justifying the rationale for lending so much money to so few developers, Fingleton recites how his analysis was supported by everybody from the Central Bank, the IMF, the OECD, the Department of Finance, economists in the banks and stockbrokers.
But when it comes to examining the serious deficiencies in corporate governance, they are all wrong. This includes the Central Bank's identification of over 1,000 alleged breaches of the society's own policies and procedures.
So many possible breaches reflect just as badly on the Central Bank as they do on Irish Nationwide.
Fingleton does not regret any of the decisions he made at INBS but is sorry that the taxpayer ended up picking up the tab.
Aren't we all, Michael? Aren't we all?
Eircom finally stops the revenue shrinkage
Eircom executives must have felt like polar bears stranded on a slowly melting ice block for the last few years. No matter what they did, the business kept shrinking. New strategies, break-up plans, cost-cutting and marketing strategies aside, the business kept looking brighter, but getting smaller as revenues fell.
During the week the telco reported fourth-quarter growth in revenues, its first since the recession hit in 2008. As it turns out, the former incumbent has been getting a lot right in recent years, but it just took time to bear some fruit.
Fourth-quarter revenues rose by 5pc while earnings in the period were up 12pc. After being caught in a perfect storm of fixed line shrinkage, no new house builds, huge mobile competition and massive debt, Eircom is emerging from the financial wilderness.
Broadband subscribers rose by 9pc to 782,000 connections while high-speed fibre uptake rose by 148,000 to 281,000 connections. Cost cuts and investment are paying off.
Its mobile arm has been growing its more lucrative post-pay customer base and one quarter of its customers now have TV/mobile bundles.
Even fixed line revenues, which have tumbled for years, grew in the quarter by 5pc. But there is no such thing as a perfect week.
After reporting its first quarterly revenue growth in seven years, it had a massive technical fault during the week.
It is too early for an IPO. Market uncertainty would rule it out anyway. However, the company is firmly on the right path and has decided to re-brand.
When Telecom Eireann was floated on the Dublin and New York Stock Exchanges in 1999, the name changed to Eircom. One reason was the fear that Americans would pronounce it "Telecom Iran". That would not have gone down well on Wall Street. We will have to wait and see what they come up with.
Numbers suggest Betfair's Breon is worth it
Betfair chief executive Breon Corcoran won't be too worried about this week's annual general meeting. Corcoran has just spearheaded a mega-merger with Paddy Power which will see him take over as CEO of the enlarged group. A shareholder advisory group, PIRC, is urging investors not to back his £11.6m pay packet, which is made up mainly of a massive one-off share award.
The share award was negotiated when he was poached from Paddy Power in 2012. It was based on meeting three performance criteria at Betfair, but the company only hit the target on two of them. The third one was removed at a shareholder meeting in January when the company said it had been introduced as an administrative error.
Some 99.8pc of investors sanctioned the removal of the third criteria at that meeting. Corcoran has transformed Betfair, growing customer numbers by 250pc since he joined and growing market capitalisation from £750m to £2.3bn. The online bookmaking platform he set up is taking bets of over £1.2bn already.
And then comes the merger announcement which has boosted the value of Betfair further.
Corcoran will have no difficulty having his remuneration cleared, especially since he has already been awarded the shares. Shareholders may ask, has Breon Corcoran been worth £11.5m to Betfair? The numbers suggest he has been worth every penny.
Sunday Indo Business