MICHAEL FINGLETON, the former chief executive of Irish Nationwide, has failed to repay a €1 million bonus to the building society, five months after undertaking to do so.
Irish Nationwide said yesterday that it had made repeated efforts to recover the money but had not yet been successful. Minister for Finance Brian Lenihan is, meanwhile, known to be disappointed that the repayment has not been made.
Considerable controversy arose after it emerged in March that Mr Fingleton had been paid the €1 million bonus just weeks after the Government introduced its €440 billion guarantee scheme to protect the banking sector.
Outgoing Irish Nationwide chairman Dr Michael Walsh had said in a resignation letter the previous month that the building society “cannot survive” without significant Government support. He said later that this was a reference to the importance of the State guarantee.
At the end of March, Mr Fingleton said he had decided to voluntarily return the payment, even though he was “entitled beyond any doubt” to receive it.
In a statement released to The Irish Timesyesterday, Irish Nationwide said: "The society has written to Mr Fingleton on a number of occasions seeking the return of the money. As of now, the money has not been returned to the society."
Last night a spokesman for Mr Fingleton said by text message that “the question of repayment does not arise at this time”.
“There are several outstanding issues in relation to this matter and until such time as those issues are resolved Mr Fingleton has no comment to make on this subject.” It is unclear what the outstanding issues referred to are.
The former chief executive stepped down from his role in April after pressure mounted over the €1 million payment.
At the time, Mr Lenihan let it be known that he was “not impressed” with the bonus and would be pursuing the matter.
When he committed to returning the bonus, Mr Fingleton said it was clear the payment was made under a valid binding contract entered into between himself and the building society “and that he has no obligation to be beholden to any other third parties in this regard”. Nonetheless, he said he wanted to bring the matter to a conclusion.
He cited the effect of a “media siege” on his family and concern for Irish Nationwide as reasons for repaying the money. In a statement, he also cited his respect for the society’s members.
The payment formed part of a €2.4 million pay package for 2008, with Mr Fingleton also the sole beneficiary of a €27.6 million pension scheme.
The bonus was described as a “pre-contracted incentive bonus”. It was paid in a year in which the society wrote off €464 million in bad loans, leaving it with pretax losses of €280 million. Mr Fingleton’s departure from Irish Nationwide on April 30th came after 37 years in charge of the society, which was established in the 1970s.