Fingleton snubs repeated pleas by Lenihan to return €1m bonus
Published 03/01/2011 | 05:00
FORMER Irish Nationwide Building Society (INBS) chief Michael Fingleton has refused repeated requests from Fin-ance Minister Brian Lenihan to pay back the controversial €1m bonus he was given as he exited the bailed-out lender.
And INBS -- which has had €5.4bn of taxpayers' money pumped into it -- told Mr Lenihan that Mr Fingleton made it clear over a year ago that he has "no intention" of giving back the money, despite earlier promising to do so, new documents obtained by the Irish Independent reveal.
The revelation comes as new figures give a detailed breakdown of the lucrative salary, holiday pay and perks paid to the former Irish Nationwide chief executive -- whose total pension package is worth more than a staggering €27m -- as he left INBS in 2009.
Mr Fingleton was paid a total of €221,030 for his final four months working with the lender -- which recorded a loss of €2.5bn in the same year.
It has been discovered that his final pay package was boosted by payments for a car, health insurance and even golf subs.
The package included:
- A basic salary of €120,000 for his final four months working with Irish Nationwide.
- An extra €76,154 for 55 days of holiday pay.
- €11,671 in car allowances.
- €9,900 in VHI health insurance payments.
- Golf subs (paid in October 2008) of €1,883.
- Phone, light and heat bills totalling €1,422.
Mr Fingleton resigned as chief executive in April 2009 after it emerged he received the €1m bonus just weeks after the Government introduced the state guarantee the previous September.
INBS was taken into state control last year as its bailout package doubled to €5.4bn while last month its senior debt was cut to junk status by ratings agency Moody's.
In January 2008 the board of INBS agreed to pay Mr Fingleton €1m as part of a deal to keep him on after he reached the usual retirement age of 70. The payment was technically not a bonus, but a "minimum contractual payment", and was given just weeks after the bailout.
Correspondence between the Department of Finance and INBS obtained under the Freedom of Information Act reveals Mr Lenihan was so incensed when he learned in March 2009 of the €1m payment he demanded a response from INBS in less than 24 hours.
That same month Mr Fingleton publicly said he would return the bonus; but the documents show he appeared to have changed his mind by November .
An email from then-INBS finance director Stan Purcell to the department states they wrote to Mr Fingleton in October 2009.
"The response was that Mr Fingleton was not repaying the bonus," he said.
"The chairman does not intend to make any more approaches. He has asked twice... The response from Mr Fingleton indicates Mr Fingleton has no intention of repaying the bonus."
Mr Lenihan wrote to INBS chairman Daniel Kitchen saying it was not an "acceptable outcome" to have decided not to make any more approaches to Mr Fingleton on the matter.
"In the absence of the state guarantee and a commitment by the State to provide capital, INBS would not have survived," he wrote.
Mr Lenihan warned that the lender must pursue Mr Fingleton's "promise" to return the €1m with the "utmost vigour and that all available options towards this end be actively considered".
The correspondence also shows that although Mr Kitchen had decided in October not to approach Mr Fingleton again, he told a society members' meeting in December that he continued to "hope" the former banking boss would fulfil the obligation he made to repay it.
Further correspondence reveals Mr Fingleton later claimed to INBS that he had agreed to repay the bonus -- but said the Government had "reneged" on the deal.
However, Mr Lenihan denied this, saying no such agreement ever existed.
There have been no formal contacts between the department and INBS in over a year in relation to Mr Fingleton's €1m payment.
There was also no mention in the documents of Mr Fingleton's reported intention to donate the €1m to charity.
However, a spokesman for the Department of Finance said informal discussions on the matter "are ongoing".
It is understood the department intends to continue to pursue the matter.
A spokesman for INBS added: "We contact Mr Fingleton periodically asking him to honour his commitment made at an earlier stage where he said he would return the bonus. He has not done so.
"We have received legal advice from two senior counsel with regard to the matter of his contractual position vis-a-vis the payment. Both have confirmed that the payment was contractual.
"He is no longer an employee and the money has already been paid. It is up to him to honour his commitment to return it."
Labour finance spokeswoman Joan Burton accused Mr Fingleton of "giving the two fingers to the taxpayer" by refusing to hand back the bonus.