State can't force ex-bank boss to repay €1m bonus
Published 01/10/2010 | 05:00
THE Government has no way to force former Irish Nationwide managing director Michael Fingleton to repay a €1m bonus he received two years ago.
Finance Minister Brian Lenihan said that while he was calling on Mr Fingleton to repay the money, there was no legal way to force him to do so.
Mr Fingleton reportedly offered to pay the money to charity, but there is no way to verify whether such a payment has been made.
Irish Nationwide chairman Danny Kitchen has written a number of letters to Mr Fingleton about the bonus issue, but yesterday Irish Nationwide said it had not received any money from Mr Fingleton and there had been no fresh contacts.
The bonus was paid just weeks after the €440bn blanket guarantee was agreed by the Government.
Mr Lenihan has been putting pressure on Mr Fingleton since March last year but to no avail. Mr Fingleton has retired on a large pension pot and is also believed to have a sizeable property portfolio.
Mr Fingleton's "pre-contracted incentive bonus" for 2008 was revealed in March of last year as part of a government report on executive pay.
The report from the Covered Institutions Remuneration Oversight Committee showed that Mr Fingleton was paid the bonus in November 2008.
The building society agreed to the bonus early last year and it was paid before the two government directors were appointed by Mr Lenihan.
Mr Fingleton's overall pay package for 2008 totalled €2.34m, which included benefits/fees of €453,240.
He was in charge of the building society when development loans were extended that subsequently went sour.
Irish Nationwide also participated in property joint ventures during Mr Fingleton's tenure at the society.
The high loan-to-values available to developers during Mr Fingleton's time have been identified as a crucial reason for the poor state of the society's property loans.
It suffered an unprecedented 72pc discount on its loans when the second tranche moved into NAMA.