Irish Nationwide chief executive Michael Fingleton has bowed to growing pressure and has announced he will return the €1 million bonus paid to him late last year.
It was recently revealed Mr Fingleton received some €1 million in bonuses in the weeks after the Government announced its bank guarantee scheme. He insisted tonight the bonus was a legal entitlement but said he had voluntarily decided to return it to Irish Nationwide.
In a statement issued on his behalf, Mr Fingleton said the bonus was a "a contractual and binding agreement with the society which he was legally entitled to receive and [which] was entered into long before the implementation of the guarantee scheme".
He said that having established his "entitlement beyond any doubt to the payment" he wished to bring the matter to a conclusion.
"Because of the effect on his family with a continuing 24-hour media siege on his home and also because of his concern for the effect it may have on the society and his respect for its members whom he has served to the best of his ability for the past 37 years, he has decided to voluntarily return the payment received to the Irish Nationwide."
Mr Fingleton said he was "pleased to note the acknowledgment by the Minister of Finance [Brian Lenihan] in a statement reported yesterday that he could not be compelled to return this payment".
"Legal opinion obtained by the society also concludes that Mr Fingleton has full legal entitlement to this payment and that it has nothing to do with the Government guarantee scheme.
"It is now very clear that Mr Fingleton¿s payment was paid under a valid binding contract entered into between himself and the society and that he has no obligation to be beholden to any other third parties in this regard."
Mr Lenihan said yesterday he had met the two Government-appointed directors of Irish Nationwide - Adrian Kearns and Rory O'Ferrall - and that he expected a report back from them on Monday.
"I have voiced my concerns to the members of the board who promote the public interest in that society and I know they'll do their jobs as members of that board," he said.
Mr Lenihan also said his department had written to the building society requesting information about whether or not the €1 million bonus could be returned.