Somers' season at Planet Plutocrat
Published 12/05/2013 | 05:00
I RARELY meet bank directors these days. David Duffy, the 10- grand-a-week boss at AIB refuses to return my calls. I spot distant Bank of Ireland directors, like Richie Boucher, high on the platform at their AGMs.
I used to bump into Anglo chairman Alan Dukes in Leinster House – but he has not been so visible since he lost his sinecure.
None of them treat me to their lavish corporate hospitality or invite me to their daughters' weddings. The absence of their company is not a yawning gap in my life, but it would be interesting to meet them from time to time. Indeed, in a rare moment of self-doubt recently I was beginning to wonder: perhaps the guys from Planet Plutocrat are really normal, misunderstood humans?
Thankfully, such a charitable thought was fleeting. I have not gone soft. Ever since I wrote The Bankers, I seem to have been off their guest list. So it was a bit of a rarity to be waiting in RTE's hospitality corridor last week and to find myself seated, alone, in close proximity to the deputy chairman of AIB.
Did you know that AIB had a deputy chairman? God knows why, but it still has. Probably because the AIB board has always needed a lucrative little number to give to an insider. For some reason this unnecessary post was spared from the axe wielded at AIB.
Today the €150,000-a-year part-time job is held by Michael Somers, former boss at the NTMA.
Somers is one of life's charmers. When I sat down beside him, I gulped gauchely but he never batted an eyelid. I have written some harsh words about his outfit in at least two books and in numerous articles.
The man who has so often been worshipped by a fawning media, was waiting to record for George Lee while I was due for Pat Kenny's programme. Far from being sour or resentful, Michael was his usual, superbly-polished self.
We stuck to safe subjects, like President Michael D plunging the dagger into the rotten heart of Europe, the deeds of the late Brian Lenihan, while skilfully skirting around Somers' role on the board of AIB.
I was itching for George to take him away. The man's amiability was getting right up my nose. Somers was so affable that I almost regretted some of the more brutal things I had written about him, AIB and his over-rated state agency. His generosity of spirit made me feel awkward.
Happily, the guilt trip lasted just 24 hours. Last Saturday morning I heard Michael's interview with George Lee while driving to the West of Ireland.
It was a bumpy journey. In the intervening 24 hours I had recalled that Somers was the highest-paid public service pensioner in Ireland's history, that he received a lump sum of €842,00 on his retirement and is drawing €265,000 a year as a state pension. A little digging revealed that the 71-year-old also enjoys big bucks from his directorships of Hewlett Packard, Willis Insurance Group Holdings and Fexco Holdings.
Two years ago he succeeded fallen Bank of Ireland chief Brian Goggin as President of the Ireland-US Council. Somers' income is in the stratosphere. His takings from the State alone amount to over €8,000 a week.
Lee introduced him to listeners with the customary media deference afforded to the man often idolised as a financial magician. Insisting that Michael was one of Ireland's "most respected and straight-talking public servants", Lee went on to reveal that he had even been awarded the Legion d'honneur, apparently for setting up the European Bank for Reconstruction and Development – an institution that Irish governments have found useful to fix up retired politicians finding themselves at a loose end.
For a moment it sounded as though George, one of the giantkillers of financial journalism, had swallowed the Somers potion; the dialogue seemed set to be another doddle for the old wizard.
I should never have doubted George. After the polite opening he headed straight for Somers' jugular. He asked the question on the minds of every AIB mortgage borrower in the country. Was Somers' bank going to pass on the 0.25 per cent European Central Bank cut to its variable rate customers?
Nobody waffles like Michael. Except possibly Enda Kenny on a really good day.
"I can't," replied the deputy chairman of the board, "speak for the board"! And then: "I don't see it happening."
Somers was answering as some sort of detached onlooker. His view – from a distance – was that AIB would probably not pass on the benefits to its customers – but how would he know, let alone have any influence on it? As Somers agonised, the entire nation knew that hell would freeze over first.
George pressed the deputy chairman, mentioning his public interest role. Somers promptly further distanced himself from his own bank's decision. "I am never comfortable not passing on interest rates . . . I find the whole thing perplexing."
Not half as perplexing as the citizens listening must have found his replies. Here was the Number Two at AIB dissociating himself from this state-owned bank's decision not to pass on the fall in interest rates to citizens in mortgage difficulties.
Why on earth is Michael – an influential director of AIB – giving interviews about the bank if he does not speak for the board, offers lofty, detached opinions on the bank's intentions and then feels "uncomfortable" and "perplexed" about its activities?
Even more peculiar was Michael's admission that the banks were "screwing" their customers with increased charges.
It was getting bizarre. How does a director, who is "uncomfortable" with his bank's failure to pass on the rate cut and believes that the bank is "screwing" its customers, stay on the board?
If those are Somers' views he should resign. AIB's antics, in "screwing" its customers, pay his vast deputy chairman's fee. Not surprisingly, high fees featured later in the interview. Somers was outed. Lee led him into tricky territory when he asked the man who earned a million euro in his last year at the NTMA, for his views on bankers' pay. This time Somers could not unhook himself from the established bankers' mantra.
He mumbled about Irish people being "mobile", how banking was a global business, that we would lose our brightest brains abroad unless we paid market rates.
At the NTMA he had always believed in "motivating" people. He modestly omitted to mention that the most "motivated" was always himself. In his last year he received a bonus of €403,000.
To back up the case for higher pay at AIB he instanced the vacant post of chief financial officer, contending that it was unfilled because the pay was so low. He persisted with the dubious thesis that if these geniuses were not paid mega-salaries they would walk.
Let them. No global competitors have yet publicly emerged as contenders for the hand of Richie Boucher (€843,000) or David Duffy (€500,000). According to Somers' logic, these guys – who accepted such low salaries – are probably below par. Perhaps he is right.
Michael Somers has without difficulty made the transition from being a vastly overpaid public servant to being an equally overpaid banker. No one can blame him for clinging onto the AIB gig. If he gave it up, the poor sod would be forced to live on six grand a week.
Even the faces are the same.