B of I staff angry at share issue cuts

Bank of Ireland staff have reacted angrily to a decision by management to cut the employee stock issue despite reporting full-year profits of €1.8 billion this morning.

They have referred the matter to a third party.

In a letter to the Irish Bank Officials Association (IBOA) this morning the bank said the staff stock issue would be cut from 6 per cent to 3 per cent this year.  

The stock issue was part of a rationalisation agreement between the bank and its staff that saw 2,100 redundancies and increased productivities. It was due to run for three years until 2009.

Under the scheme, the bank purchases shares worth 6 per cent of the employee's salary which the employee can then sell, tax free after a three-years. All 16,000 staff were included in the arrangement.

Larry Broderick IBOA general secretary said it was "particularly galling that an important element in their overall remuneration package is being targetted for cut-backs when they have delivered their side of the bargain in terms of reduced staffing levels, increased productivity and co-operation with significant change".

He said Bank of Ireland was the second major Irish bank to cut back on their staff's legitimate pay expectations within three months. He said the IBOA had been contacted by Bank of Ireland staff angered at the move.

Mr Broderick said the independent facilitator, Kieran Mulvey who brokered the rationalisation agreement, said the the staff stock issue should be forthcoming unless, due to unforeseen circumstances, the bank fails to meet growth targets or cost savings.

However,Bank of Ireland chief executive Brian Goggin described the 3 per cent stock issue to staff as “a fair and equitable free award to our staff”. He said the bank was not obliged to make a 6 per cent stock issue and could have chosen not to make any.

A bank spokesman added that the agreement was dependent on cost and earnings targets being achieved. The bank had met the cost target so the first 3 per cent staff stock issue was going ahead but had not met its earnings targets, so the second 3 per cent was not.

The bank's preliminary full-year results released today showed that the bank has made €145 million a year in cost savings and that the targeted job reductions have been achieved a year ahead of schedule.

Mr Broderick said the "IBOA has now referred the matter to Mr Mulvey."