Paddy Power may pay out on McCarthy
CORMAC McCarthy, the former Ulster Bank boss whose bank helped pioneer toxic 100 per cent mortgages in Ireland, is in line for a massive €2.02m bonus in his new job at Paddy Power bookmakers.
Last week McCarthy was conditionally awarded 35,000 shares in the €3bn listed firm, where he now serves as finance director. These shares were awarded under the company's "2004 long-term incentive plan". The shares, worth over €2.02m at Friday's closing price, tied McCarthy to the firm until 2015, the earliest date at which they may vest. The former banker must hit certain targets during that time in order to receive the shares.
"The awards vest if earnings per share grows by an amount at least equal to the compound growth of the consumer price index plus 12 per cent per annum, over a period of three years," according to a company spokesman. "
Until the target is met , the person who has received the award has no rights over the shares. As CFO, Cormac McCarthy has been included in this Plan by the Remuneration Committee, in line with other senior Paddy Power managers."
The Paddy Power bonus award marks quite a turnaround for the former banker. McCarthy was chief executive of Ulster Bank for seven years until he stepped down last year, as the bank faced losses of billions on its loan book. Ulster Bank had been involved in funding developers ranging from Sean Dunne, Bernard McNamara and Gerry Barrett as well as prominent business men like Bill Cullen.
Ireland's third largest bank has needed €10.8bn in bailout funding from its UK parent RBS since 2008 in order to stay afloat. The 950 job cuts announced at the start of 2012 will see the bank's headcount fall from over 6,000 during the boom years down to 4,000.
While parent company RBS has faced its own problems in the UK, Ulster Bank has been its worst performing unit. "For all those who say investment banking is this evil thing, as a terrible activity which lost all the money, the most money that RBS lost, the least wise decisions, were property lending in the UK and Ireland, of which Ireland was the worst of all," RBS boss Stephen Hester said last February.
McCarthy announced that he would leave Ulster Bank in July 2010 but agreed to stay on until a replacement was found. New Zealander Jim Brown became chief executive in April 2011.
Despite the eye-watering losses racked up by his bank, McCarthy was in demand in the jobs market.
McCarthy was also recruited by BWG, which manages the vast Spar and Centra chain of convenience stores. He joined the board as a non executive director in May 2011, serving alongside former Anglo chairman Peter Murray and Stafford Holdings and Killeen's Stewart Harrington. He joined the board of Paddy Power in September 2011, becoming its chief financial officer last month.
Companies Office documents show that McCarthy joined the board of the UCD Foundation late last year. The board, which raises money for the university, has included the likes of former BoI governor Laurence Crowley, former Nationwide chairman Michael Walsh and former BoI chief Maurice Keane, now a public interest director at Anglo.
Sunday Indo Business