Bank of Ireland misled Lenihan on bonuses

BANK OF Ireland repeatedly misled outgoing Minister for Finance Brian Lenihan by insisting that no performance-related bonuses had been paid to its senior management, a report by the Department of Finance reveals.

The bank is to pay €2 million to the State in recompense for misleading Mr Lenihan and the Oireachtas on bonuses.

Following a parliamentary question in November 2010, the bank insisted to Mr Lenihan that no performance-related bonuses had been paid in respect of the financial years ending in March 2009 and December 2009. This “incomplete and misleading” information was relied on by Mr Lenihan in his replies to parliamentary questions about bank bonuses.

In fact, more than €66 million has been paid in bonuses to Bank of Ireland staff in the period from September 2008 to December 2010, the report states.

The Department of Finance said all of these bonuses were performance-linked, but they were not classified as such by the bank.

Following an investigation, it has emerged that senior executives in Bank of Ireland were paid previously contracted bonuses of €4.3 million since the introduction of the bank guarantee in September 2008. The bank also claims it is due to pay contractual bonuses of €600,000 to senior executives in 2011 and a further €200,000 in 2012.

The bank has advised that payments of up to about €11 million to 250 staff may be payable by the group in 2011.

In a statement, the Department of Finance said the recently introduced 90 per cent tax on bank bonuses would apply to any future bonuses paid by Bank of Ireland.

The report states that figures confirmed in writing by Bank of Ireland chief executive Richie Boucher were subsequently found by the bank’s own audit team to have been wrong.

The department said the number of discrepancies was “unacceptable” and the bank’s “uncommon” interpretation of a performance-related bonus was “inappropriate”.

Bank of Ireland apologised to the Minister and his officials “for the quality of the information” supplied and the delay in providing it. It said it had not intended to mislead the Minister or the Dáil.