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Outrage as AIB hands out €40m cash to staff

OUTRAGE was mounting today over AIB's multi-million Christmas bonus for staff.

As the country reels from the latest hairshirt Budget, it was revealed that AIB plans to hand selected staff a bumper €40m bonus in their Christmas pay packets.

Labour's Roisin Shortall said that payouts were an "affront to decent people" and "further evidence that the banks are still existing in a parallel universe".

Fianna Fail backbencher Chris Andrews told the Herald that he found the payouts "unbelievable".

"The fact is, these institutions do not have the money to increase staff wages and pay bonuses," he said.

The move is likely to spark fury among shell-shocked AIB shareholders who have seen the bank's shares plummet from €23.95 to just 50 cent since the bank guarantee was introduced.

Despite a ban on paying bonuses, the struggling bank will give handouts to hundreds of privileged employees, including executives.

On Saturday, the Herald revealed how AIB had paid out nearly €55m worth of bonuses last year -- but it has now emerged that another tranche of bonuses is in the offing.

Workers described as "key staff" have already received €3.4m in 2010 and another €40m will be forked out on December 17.

Calls were today mounting for the bank to stall the bonuses -- dating from 2008 -- but it is understood they must be paid because of legal implications.



Freefall

Action by a trader, John Foy, over a deferred €161,000 bonus awarded in 2008 has led the bank to conclude it will need to pay bonuses to many of the staff to whom they were awarded for that year.

Overall around 2,400 staff will get the cheques worth an average of €16,700.

The Herald has already revealed that in the first nine months of the year, some 76 staff shared in pay increases worth €781,000.

The money is to be paid out for work done in 2008 when the bank went into freefall and had to be rescued by the taxpayer.

In reply to a recent parliamentary question, Finance Minister Brian Lenihan noted that AIB operates "in an arms length capacity in relation to operation issues".

"It is a matter for the respective individual boards and senior management to determine and implement pay policy in their organisations subject to their relevant operating environment," he said.

But Deputy Shortall has accused the Minister of having taken a "weak approach" to the banks.

"The bailout should have been on the condition that an end was brought to excessive salaries and pensions and the bonus culture that has existed for so long," she said.

The Government has already pumped €3.5bn propping up AIB but the final bill is likely to be much higher.

Just last week, the bank said it will need to raise €5.3bn of additional capital by the end of February in order to reach targets set by the Central Bank.

kdoyle@herald.ie


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