An immediate review of the position of Irish Nationwide Building Society's chief executive, Michael Fingleton, and other senior management is to be carried out alongside an investigation into the bonuses paid to the CEO, Minister for Finance Brian Lenihan confirmed this afternoon.
Mr Lenihan confirmed he had discussions yesterday with Adrian Kearns and Rory O'Ferrall, the two directors of Irish Nationwide Building Society appointed to promote the public interest on foot of the Government Guarantee Scheme.
He said that "recent disclosures in relation to the remuneration of the CEO of the INBS require investigation" and said it must be carried out by the two directors appointed to promote the public interest within one month.
The Minister said the position of board members and senior management will be reviewed "having regard to the current market position” and asked for a briefing from the board.
Earlier today, Tánaiste and Minister for Enterprise Mary Coughlan said she felt the €1 million bonus Mr Fingleton received after the commencement of the State guarantee scheme had created "huge difficulties" and should be given back.
“I wouldn’t want to pre-empt my Cabinet colleague’s final decision but he [Mr Fingleton] has created a huge difficulty,” she said.
Last night the Minister for Foreign Affairs Micheál Martin told RTÉ's Questions & Answersprogramme: "I think we've already asked for it back and it should be returned".
Mr Martin said the banking and financial world needs to get a grip on reality, adding "people on €20,000 and €30,000 have had to endure income reductions, people have lost their jobs, and meanwhile people are saying in banks they can't work for half a million or they can't work for €400,000 . . . and that just needs to change".
Today’s Cabinet meeting comes after it was revealed that one Irish Nationwide’s own board members, Danny Kitchen, had agreed to replace Mr Fingleton as chief executive of the building society but later declined the job after the Government capped the salary for the position at €360,000 a year.
Mr Kitchen, who is the Irish Stock Exchange’s nominated director on the Irish Takeover Panel, became a non-executive director of Irish Nationwide last October. He has experience in both finance and property.
Mr Kitchen declined to comment. Asked whether he would accept the job if the salary was increased to the Government’s higher cap of €500,000 for senior bankers, he said: “It is what it is.”
A spokesman for Irish Nationwide said he had no comment.
It was reported yesterday that a replacement chief executive, who had agreed to succeed Mr Fingleton, has told the society that he has decided not to take the job due to the Government’s salary cap.
It is understood that the society offered to pay him €700,000 a year and that his pay was agreed after the Government guarantee was introduced last September.
A Department of Finance spokesman declined to comment.
Meanwhile, the Green Party increased the pressure on Mr Fingleton to resign yesterday over the payment of the €1 million bonus last November, just weeks after the Government moved to protect the Irish banks with the €440 billion guarantee.
The party also criticised Mr Fingleton’s pension arrangements through which he is the sole beneficiary of a €27.6 million pension scheme transferred out of the society to another retirement benefit scheme in January 2007.