€1.5m top-up is part of my deal: bank chief
'I understand public anger,' Boucher says, as ex-IL&P boss gets €4.5m
Published 18/04/2010 | 05:00
Bank of Ireland chief executive Richie Boucher has personally defended his €1.5m pension top-up amid angry calls for it to be given back.
His defence comes as the Sunday Independent can also reveal that Irish Life & Permanent gave its former chief executive Denis Casey a €4.5m pay-and-pensions golden handshake.
Mr Casey was forced to resign over his role in the €7bn back-to-back loan transfer in late 2008.
Mr Boucher, has claimed the top-up came about because of a "change in my contract" resulting from his elevation to the position of chief executive.
Speaking exclusively to this newspaper yesterday, Mr Boucher said: "I can fully understand the public perception of this issue and I am keenly aware of the public's reaction. However, the position is that my contract changed and my pension fund needed to be funded. That is a matter between the pension fund and the company. That is all I can say at the moment."
Bank of Ireland injected €1.45m into the pension pot for Mr Boucher, to enable him to retire at the age of 55, which is the norm for chief executives. As a result of the top-up, Mr Boucher will retire with an annual pension of €367,570, according to figures released by the bank.
There were angry calls yesterday from opposition parties for Finance Minister Brian Lenihan to intervene, describing the award as "offensive". Union leaders have also heavily criticised Mr Boucher's award at a time when their members within the bank are to be balloted to accept a cut in their pensions.
Fine Gael finance spokesman Richard Bruton said yesterday that Mr Boucher's pension top-up was offensive to taxpayers who were picking up the pieces of years of bank incompetence.
Mr Bruton added that, as was the case with the pay increases at Anglo Irish Bank, Minister Lenihan could intervene with regard to this type of payment and asked what the minister knew and when.
"There needs to be a reality check at the banks," he said. "Decisions in these institutions and at the Fianna Fail Cabinet table brought the country to the brink of ruin. There must be some form of recognition by the banks' boards and management of their responsibility for the economic crisis and just how offensive this pension top-up is to ordinary taxpayers."
Labour's finance spokeswoman Joan Burton, speaking in Galway at her party's conference, said senior bankers like Mr Boucher were "living on another planet".
She said: "We have seen this country brought to its knees by dodgy developers, greedy bankers and failed politics.
"Then we see one of those bankers who has been bailed out by the taxpayers gets a €1.5m top-up. How can this Government have any credibility when it allows bankers walk away with a €1.5m top-up when people on low wages earning less than €30,000 are having their pay cut?"
She heavily criticised Finance Minister Brian Lenihan for his failure to stand up to the banks.
"Brian Lenihan has come into the Dail and told us solemnly many things that have subsequently turned out to be rubbish.
"One of those things was that bankers' salaries would be capped at €500,000. We know now that's not the case.
"Senior bankers don't get paid like the rest of us, they get compensated for their efforts. They are not just in another league, they are on another planet."
Mr Lenihan said it was not a matter for him to intervene on, and while he could not justify it there was nothing he could do about it.
Speaking to the Sunday Independent, he said: "This is not a direct payment to Richie Boucher -- his pension reflects his salary and the bank has to fund his pension."
He earlier told RTE news: "That's the agreed pension in Bank of Ireland. Such pension funds insist on contributions being made into them.
"It is not a payment to Mr Boucher directly, but it is a payment to sustain his agreed pension, which is based on his salary and his salary is now controlled by the Government," he said.
Meanwhile, Mr Casey's staggering pay-off included a €350,000 salary payment, an additional €1.3m payment and a total pension settlement worth €2.9m.
He was one of three directors who were forced to resign in February 2009. Two other senior executives, finance director Peter Fitzpatrick and head of group treasury David Gantly, also resigned from the company in the wake of the controversy over deposits made to Anglo Irish Bank.