Doherty will get €100,000 each year for life
Published 01/10/2010 | 05:00
OUTGOING AIB managing director Colm Doherty is likely to walk away from the bank with an annual stipend of more than €100,000 for the rest of his life, but executive chairman Dan O'Connor won't get a thing.
Finance Minister Brian Lenihan yesterday refused to be drawn on the pay-offs to AIB's departing executives, saying only that it would be "in accordance with their contracts".
But it is understood that Mr O'Connor is not entitled to any payout since he has no contract with AIB. The specifics of Mr Doherty's contract are unclear, but the banker is entitled to a substantial pension.
The last annual report for AIB showed Mr Doherty was in line for a yearly income of €303,000, if he'd stayed on with the bank until his agreed retirement age, thought to be 60.
Pensions experts last night said that if Mr Doherty (52) were to retire eight years early and draw his pension eight years longer, the annual income could fall to about €180,000.
Asked about his pension and pay-off arrangements, Mr Doherty said he was "not making any comment on that".
A spokesman for AIB also declined to reveal details of the duo's entitlements. But sources stressed that there was no question of a "golden handshake".
Staff are understood to have been "shocked" at the imminent departure of Mr Doherty and Mr O'Connor -- both in their jobs for less than two years.
Mr Lenihan yesterday refused to be drawn on whether the pair had been asked to leave AIB, insisting that "there was an agreement arrived at" between his officials and the bankers.
The Finance Minister yesterday said it was "clear that there must be a fundamental management and board change" since the State would now effectively own the bank.
A wider management and board reshuffle is expected over the coming months. Sources said the appointment process would probably be run by the National Treasury Management Agency, who would seek executives on short-term contracts.
When Mr Doherty acceded to the top job last year, the Government claimed it was hard to attract outside candidates to the job. The chances of an internal candidate succeeding Mr Doherty are seen as remote.
Mr Lenihan yesterday paid tribute to the contributions of both Mr Doherty and Mr O'Connor, citing the €3bn sale of AIB's Polish interests as an achievement that had "saved the taxpayer billions".