MINISTER FOR Finance Brian Lenihan will this week increase pressure on Irish Nationwide chief executive Michael Fingleton to repay a €1 million bonus paid after the guarantee to the banks and also question the board of the building society over his pension arrangements.

A spokesman for the Department of Finance said that the Minister would meet the board of the building society this week and raise both issues in discussions.

The department is seeking the repayment of the bonus paid to Mr Fingleton last November just weeks after the introduction of the guarantee on September 30th.

The department is also investigating whether Mr Fingleton was the sole beneficiary of a €27.6 million settlement by the society of a defined benefit pension in 2007.

Minister for the Environment John Gormley yesterday said that Mr Fingleton’s position was no longer tenable following the disclosure that he received a €1 million bonus after the guarantee.

“The situation here is that Mr Fingleton gave himself a very generous bonus after the Irish Nationwide received the guarantee from the State,” Mr Gormley said. “It was totally inappropriate. I am saying very clearly that all of the money should be given back. Mr Fingleton should also immediately consider his position. In my view, his position is now untenable.”

Mr Gormley said he was confident that Mr Lenihan would take the appropriate corrective action after meeting with the board of Irish Nationwide later this week and after the conclusion of the investigation being undertaken by the Department of Finance into pay levels at the building society.

Mr Gormley’s comments came a day after his party’s chairman Dan Boyle described Mr Fingleton’s conduct as a “disgrace”.

Mr Boyle contended that Mr Fingleton ran the Irish Nationwide like “his own personal fiefdom”.

The society’s 2007 annual report showed that a pension payment of €27.6 million was made in January 2007 as “settlement of defined benefit obligation” by transferring out of society’s control “the associated assets and obligations of the scheme to another retirement benefit scheme”.

The building society said in the annual report that this represented “full and final settlement of the group’s pension obligation to members of the scheme”.

Mr Lenihan will seek clarification of the building society’s pension arrangements this week.

A spokesman for the building society said that Mr Fingleton managed his own pension scheme for years in agreement with the society and that total contributions by the society into this pension amounted to €3.5 million.

The spokesman had no comment on who benefited from the €27.6 million pension settlement.

Mr Lenihan believes the payment of a €1 million “pre-contracted incentive bonus” to Mr Fingleton last November breached the terms of the guarantee. The department is threatening to alter the terms of the guarantee to force the repayment of the bonus.

The Covered Institution Remuneration Oversight Committee (Ciroc), which was set up under the guarantee to assess bankers’ pay, recommended that no bank bonuses be paid for 2008.

The building society has claimed that the bonus was agreed last April, before the guarantee.

Ciroc also called for a review of bank executives’ pensions, saying it had “become aware of a practice in which cash allowances were paid to compensate for the effects of the ‘pensions cap’ imposed by the Finance Act 2006”.

The committee found that in general bank managers made little or no employee contributions for their pensions. Ciroc suggested that there should be an appropriate balance between contributions by employers and employees and that employee contributions “may need to be increased”.