Wednesday 26 November 2014

This bonus call didn't appear out of nowhere

Published 30/01/2014 | 02:30

MICHAEL Noonan's vehemence in ruling out bonuses at AIB raised the peculiar question of who exactly the bank has been in talks with on the issue over the past few weeks?

Certainly, Mr Noonan could hardly have been more emphatic in his rejection of the idea.

In a nutshell, he said that there would be no bonuses for AIB top brass and if they didn't like it, well, they knew where the door was.

That is hardly surprising – bankers' pay is a toxic issue for politicians and never more so than in an election year.

Indeed, Mr Noonan seemed to suggest it was pointless of AIB to even raise the matter.

But that being the case, how was it that the bank's chairman, David Hodgkinson, had apparently been in talks with officials at Mr Noonan's own Department of Finance on precisely the remuneration issue over recent weeks?

It seems unlikely that officials at the department would have neglected to inform Mr Noonan that such sensitive issues were being raised.

And with his mind so clearly made up, you'd wonder why the officials bothered discussing the matter at all.

After all, with the bank's chances of success set at zero, surely it would have been easier all around to tell AIB up-front that they were on a hiding to nothing and nip the talks in the bud?

Who knows? We do know that once news of the discussions became public, the department moved rapidly to kill the idea.

Caps on pay at bailed-out banks are imposed by the Government. But as Finance Minister, Mr Noonan does have the power to waive the rules if he feels this is appropriate.

However, the bonus issue is dead now, for sure. Mr Noonan's word on the issue is final.

Irish Independent

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