New group plans to claim for AIB bonuses

A SECOND group of AIB workers was yesterday planning to file claims for bonus payments ranging from €3,000 to €38,000 with the courts.

The Credit Institutions (Stabilisation) Act is due to come into force today giving, amongst other things, the Minister for Finance the power to make support for banks conditional on them not paying bonuses.

It is understood a group of staff in AIB’s capital markets division were yesterday considering filing claims with the Circuit Court for the payment of bonuses promised them by the bank for 2008, but since deferred.

Earlier this week, Minister for Finance Brian Lenihan warned the bank that if it went ahead with plans to pay €9.2 million in bonuses, the Government would not provide it with any further bailout funding.

AIB was planning to pay the bonuses after one capital markets trader, John Foy, succeeded in getting a High Court judgement against the financial institution for his €161,000 bonus.

Around 90 of his colleagues had taken similar action and the bank believed it had no choice. It then said it would not pay those bonuses after the Minister intervened.

Overall, the bank was due to pay €58.7 million in bonuses, with some senior individuals receiving up to €780,000.

AIB is due to get over €13 billion from the taxpayer and the State will end up owning over 90 per cent of the group as a result.

A number of sources confirmed a second group of capital markets staff was planning legal action to force the bank to pay the bonuses.

Its members intended to file the initial documents relating to the claim with the court yesterday to ensure their case was in the system before Bill was passed.

Existing and former capital markets staff entitled to the bonuses were canvassed earlier in the week for the personal details needed to initiate the claim.

The sums involved range from around €3,000 up to €38,000, the maximum amount that can be dealt with by the Circuit Court.

It was not known if the plan to file the claims went ahead yesterday. Sources said not everyone who is entitled to the bonuses were actually intending to join the group.

The bonuses related to 2008, the year that exposure to the rapidly falling property market almost crashed the Republic’s financial system.

Most of the people entitled to the payments worked for capital markets, a profitable division that had not been involved in property lending on a large scale. The bank is contractually bound to pay the bonuses.

Staff in the British and US subsidiaries of this division have already been paid €17 million in bonuses after threatening to sue the bank. The bank has also paid €39.2 million in bonuses relating to 2006 and 2007, and a further €2.4 million to junior management and clerical staff in offices in Jersey and the Isle of Man.

Bank of Ireland has also paid bonuses to what it says is a small number of middle managers, but the bank is refusing to reveal details of how much it actually paid out.

There is said to be growing anger amongst AIB Capital Markets staff at the fact that while the public row over the Foy case has effectively barred them from receiving bonuses, their overseas colleagues received their payments, as did those working for competitors such as Bank of Ireland.

AIB originally promised the bonuses in early 2009, after the State had committed to recapitalising the institution. The bonuses were for 2008, and were agreed in January and due to be paid the following month.