Packages enjoyed by bankers among most lucrative in land
WITH typical payoffs of one year's salary 'in lieu of notice' plus significant pension contributions, bankers' severance packages are among the most lucrative in corporate Ireland.
Most banks don't publicly disclose their policies for paying off executives since the terms tend to be tied into individualised contracts, but there's enough history out there to build up a good picture.
Bank of Ireland, AIB and Irish Life & Permanent all have form in paying their ousted executives one year's salary in lieu of notice, something very rare across the rest of corporate Ireland.
The sums involved can be staggering -- BoI's Brian Goggin got €1.4m in lieu of notice when he headed off in early 2009 and Irish Life & Permanent boss Denis Casey got €1.25m when he left, also in early 2009.
Industry sources say the in-lieu-of-notice clause for executives lower down the food chain would typically be for shorter periods.
A handful of very senior executives might be on six-month notice periods, and so would get payments of six months' salary if they're forced out.
Many would only be on three months' notice, triggering lower payments.
The new management team at Anglo has overhauled policies there -- the bank last night confirmed that its top executives get a maximum of six months' severance pay.
Pension top-ups are also typical under the older regimes.
AIB's Colm Doherty, for instance, got cash payments of about €2m when he left the bank to reflect the fact that the bank would no longer be making payments to his pension.
In a statement yesterday, Mr Doherty said his exit package was in keeping with his agreed contract, implying that the pension payments were set out in his terms of employment.
In new-era Anglo, all executives are on the cheaper defined-contribution pensions, so they have no guarantee of a set amount on retirement, and top-ups aren't typical on termination.
Paul Glenfield, who heads up the employment team at lawyers Matheson Ormsby Prentice, said bankers' exit packages were at the 'top scale' across corporate Ireland.
"In some cases, companies will take the view that it's better to agree a package than to go through a legal process," he added.