Gene Kerrigan: What a performance! Wave more cash!
Talent doesn't come cheap, and when we have it we must pay dearly to keep it, writes Gene Kerrigan
Published 02/10/2011 | 05:00
You probably think Michael "Fingers" Fingleton is a greedy little bastard. With nice teeth. If so, you've been paying too much attention to the media over the past few days.
The hacks have portrayed Mickey Fingers as an avaricious man who scuttled out the door of Irish Nationwide, his pockets bulging and his bank left in flitters.
Let's put a human face on this poster boy for fat-cat self-indulgence. Mickey Fingers is a victim of his environment, as any of us might be.
Okay, I know it looks bad.
I mean, Mickey ran up €48,000 in "expenses" at the K Club. And claimed €12,180 in expenses for "dental work".
The €2,360 blown on hiring chauffeur-driven cars can be explained -- I mean, you wouldn't want someone with teeth as lovely as Mickey's to stand at a bus stop, while the likes of John O'Donoghue wafted past in the back seat of a ministerial Merc?
But, let's accept that people have reason to suspect that Fingers went beyond what he was entitled to. After all, Fingers is getting on a bit -- and perhaps he just got confused.
After all, the kind of "packages" available at the top rung are such as to make anyone's head spin. Others, none of whom have gone over the line that Fingers is suspected of having crossed, are doing pretty well.
Take Jimmy "Bananas" Tolan, who was in the news last week. For a while, Jimmy was head of Fyffes, the curved yellow fruit specialists. In 2008 he was recruited as CEO of VHI, the health insurance folk. The VHI people thought their head banana should be paid €650,000. An independent review suggested that €297,000 would be appropriate.
So, €297,000 it was. So, how come, I wondered, last year Jimmy Bananas got €411,000?
Turns out the €297,000 is base salary. Plus a performance bonus, car allowance and a substantial retirement fund -- bringing the package up to about €545,000. At one stage his "performance-related" bonus hit €37,000. I've never understood that. A chap gets several hundred thousand euro to do a job. Then, he needs another few grand to do the job properly.
If there was no "performance-related" element, would Jimmy sit around all day polishing his fingernails and dreaming of the good old days when he sold bananas for a living?
Ah, but -- executives need "incentives" to "reach targets".
Really? It's well established in academic research that incentives work when applied to repetitive manual jobs. If you're paid by the number of washers you stamp out or the number of mushrooms you pick, you'll work faster. Incentives have no bearing on brain work, the taking of decisions and the thoroughness of analysis. Waving money at such people is arguably a dangerous distraction.
Anyway, Jimmy recently waived a bonus, which was nice of him. He's leaving VHI and it's been reported that his replacement will receive a mere €191,000. This, of course, will be the "base salary", around which they'll build a "package".
Ah, but -- if you don't pay big bucks you won't be able to recruit the top people. Which explains why Michael "Fingers" Fingleton, for instance, got €839,000 the year before he left Nationwide. Plus the usual extras. People think he was paid a "bonus" of a million euro, which he won't pay back. That's not true. It wasn't, strictly speaking, a bonus. It was a sweetener. Mickey Fingers was retiring from Nationwide, and they managed to entice him to stay on another year -- for a million euro.
You see, talent like Mickey Fingers doesn't come cheap. And when you find genius you have to hang on to it.
Now, there are those who say that, after Mickey's stewardship, Irish Nationwide was worth slightly less than a stall selling second-hand underwear at a car boot sale in the middle of a bog on the rainiest Sunday in winter.
But, then, there's no pleasing some people.
Mickey's pay was relatively modest. The pushiest guys at all the banks got the top jobs, with bonuses galore -- and it's just coincidence that these same gobshites ran their businesses into the ground.
After the banks collapsed, the Government capped banking CEO pay at €500,000. Currently, David Hodgkinson, chairman of AIB, is trying to push the Government into raising the cap. Good old Dave, what a joker.
Richie Boucher, of Bank of Ireland, is on €690,000, and I don't know why. Richie was asked about this at an Oireachtas committee and he said, "I am not going to comment on my own salary."
Of course, it must be galling for Dave, trying to recruit a CEO to AIB for a mere half a million, when Richie at Bank of Ireland is on almost €200,000 more.
But maybe we can give Dave something to think about. AIB had various CEOs in the past, people who were paid millions per year.
And under their highly incentivised stewardship, the bank did a nosedive.
For the past year, AIB hasn't had a CEO. And it's been staggering on. It would be dead without the state bailout, but the performance without a CEO has been -- I think you'll agree -- better than when it was saddled with the highly paid losers.
Quite the Sherlock Holmes, isn't he?
So, you see the corporate environment everywhere.
Yesterday's Irish Independent story about presidential candidate Mary Davis -- the woman behind Bertie's Bowl -- was a gobsmacker.
It's been wonderful hearing her tell us about the importance of volunteering, and there I was assuming she volunteered for that Special Olympics work.
Or, at least, that she got a living wage to free her up so she could do it full time. But, a salary of €156,000? Gobsmacked, I was.
And then another €61,600 for her Bertie Bowl duties. And €90,300 for being on the board of Dublin Airport Authority. And €36,500 as a director of the Broadcasting Commission of Ireland. Plus, wrote Cormac McQuinn in the Indo, "a minimum of €168,750" in fees, over seven years, for some Bank of Ireland appointments.
Nice work if you can get it.
But, then, of course, without people as well-paid as Mary on the board, we wouldn't have that wonderful Bertie Bowl. And the DAA would be presiding over extravagant waste. Etc, etc, etc.
Mickey Fingers may appear to be a greedy little bastard.
But bankers, all sorts of executives, top civil servants and government ministers have been on tremendous "packages".
If that kind of money wasn't enough for Mickey Fingers, and he crossed the line into "suspect" behaviour, well, I'm sure it's just a mistake -- wood for the trees, that kind of thing.
Let us not mock Mickey. Let us instead embrace the opportunities this gives us to empower the positive and move on into the . . . Oh, dear God, I've been listening to too much of this presidential carry-on.