The bank officials union has described as "derisory" the latest profit share scheme made available to the 17,000 staff at Bank of Ireland.
The Irish Bank Official's Union (IBOA) said the 3 per cent of profit share figure illustrated an "astounding arrogance" by the bank. It said the decision to only offer 3 per cent did not auger well for the talks currently under way on a major rationalisation programme at the bank.
However, the bank rejected the union's claims and said the award reflected the performance of the business in the year to the end of March. A spokesman said the award was based on a complex earnings-per-share formula.
The IBOA said the bank agreed to pay 3.5 per cent last year, but was now reducing this. It also said Kieran Mulvey, a senior Labour Court official, last year recommended a 4 per cent increase based on the changes staff had to cope with under the bank's transformation programme.
The IBOA said the bank now seemed to be ignoring Mr Mulvey's recommendation.
However, the bank strongly denied this and said that Mr Mulvey simply said any profit share should not be less than 3 per cent. The bank said Mr Mulvey made it clear the other 1 per cent was discretionary. It added that Mr Mulvey made no recommendation concerning the year to the end of March 2005.
Larry Broderick, general secretary of the IBOA, said that bank staff were very angry about their profit share being reduced.
"This year's announcement of a 3 per cent award adds further insult to injury, particularly when they are announcing unprecedented profits and proposed job losses of 2,100.
"At a time when banks are making record profits and their senior management are rewarding themselves with massive pay increases and generous share options, it is only just and equitable that IBOA members, who make the major contribution to the success of the group, should share in that success," he said.
He added that the attitude of senior management to staff did not auger well for talks under way on the bank's latest cost-reduction programme. The bank, however, said the issue of profit sharing for staff was ultimately one for the bank's shareholders.
Last week, Bank of Ireland reported a 10 per cent rise in profits to €1.4 billion in the year to the end of March with its Irish retail banking operations yielding the biggest increase in profits.
The Irish retail division posted a 17 per cent increase in profits to €490 million. Notwithstanding this performance, the bank's chief executive, Brian Goggin, said this part of the Bank of Ireland group would be one of the key targets for its imminent cost-cutting programme that includes 2,100 job losses.
Mr Goggin said that 40 per cent of the € 120 million a year in savings it expects to achieve over the next three to four years would come from its retail bank. This suggests more than 800 jobs at its branches and other retail operations could go.
Meanwhile, Mr Goggin is sitting on a paper profit of more than €700,000 after he exercised executive stock options over 80,000 shares yesterday.
Mr Goggin spent €259,280 to buy the shares at a price of €3.241 each yesterday. The stock closed at €12.08 last night.
The banks' directors have also acquired shares in the bank in lieu of part of their directors' fees. Bank of Ireland governor Laurence Crowley was awarded 895 shares, worth more than €108,000 at last night's close.
Deputy governor Richard Burrowes received 358 shares while director Roy Bailie was given 238 shares. Most of the other directors were awarded 168 or 169 shares apiece.
