MINISTER FOR Finance Brian Lenihan authorised significantly increased salaries for senior Anglo Irish Bank staff last year because of the “increased workload” facing the bank.
Salaries for the chief executive of Anglo and other banks which availed of the Government’s credit guarantee were capped at €500,000 by the Minister last year.
The recommended pay levels for other senior executives were set by an independent committee established to examine bankers’ pay, known as the Covered Institutions Remuneration Oversight Committee.
Following discussions with Anglo Irish Bank, Mr Lenihan increased salaries for the chairman and board members of Anglo to levels above that recommended by the committee, records show.
The chairman’s fee was increased from €218,000 to €250,000, while non-executive directors’ fees were increased from €44,000 to €73,000.
A letter to Anglo from the Department of Finance states that the Minister agreed to the fees in excess of those recommended by the independent committee on the basis of the “exceptional circumstances” of the bank and the “resulting increased workload for the board”.
In addition, an unpublished internal memo indicates that the Minister or his officials had been proposing to cut the pay of Anglo’s chief executive to €394,000. He later agreed to a salary cap of €500,000, in common with other major banks.
The document also includes proposed fees for Anglo's chairman (€158,000) and for board members (€32,000) at levels significantly below what the Minister later agreed to. The memo was entitled, Minister for Finance directions on remunerationand included a table of salaries for chief executives and fees for board members "as required by the Minister for Finance".
In a statement, a spokesman for the Minister said this document was only an internal section working paper and never went to the Minister. Later, when asked if the Minister was aware of the contents of the memo, the spokeswoman said that there was no evidence that the Minister was aware of it. On the decision to increase salary levels for other senior Anglo staff, the Minister's spokesman said the board of Anglo was small at the time and the demands on non-executive directors were substantial. As a result, board members were required to sit on a significant number of sub-committees, in addition to regular board meetings. As for other senior executives whose salaries exceeded the €500,000 cap, Mr Lenihan agreed to the bank's proposal of a 20 per cent reduction in salary, with pension entitlements unaffected. The details are contained in records released to The Irish Timesunder the Freedom of Information Act.
