THE CHIEF executive of Irish Nationwide Building Society Michael Fingleton has bowed to mounting pressure over the last fortnight and agreed to repay the €1 million bonus he received last November after the guarantee.
Two weeks after his 2008 bonus payment was publicly disclosed, Mr Fingleton said in a statement yesterday evening that he would repay the bonus, but insisted that he was legally entitled to it.
The statement said that even though Mr Fingleton was entitled to the bonus payment, he wished to bring the issue 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”.
Mr Fingleton said the bonus he received was “a contractual and binding agreement with the society which he was legally entitled to receive and was entered into long before the implementation of the guarantee scheme”.
Mr Fingleton had received a €1 million “pre-contracted incentive bonus” for 2008, which was agreed by the society last April.
He said in his statement that he was “pleased” to note the acknowledgment by Minister of Finance Brian Lenihan earlier this week that “he could not be compelled to return this payment”.
The statement added that legal opinion obtained by the building society concluded that Mr Fingleton has “full legal entitlement to this payment and that it has nothing to do with the Government guarantee scheme”.
The statement said it was “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”.
Heated negotiations have taken place in Irish Nationwide about Mr Fingleton’s future in the society ahead of the board reporting back to Mr Lenihan on their review of the management and board structure. Mr Lenihan has asked the society’s directors to review the board and management team, and expects the review by Monday.
Pressure has been mounting on Mr Fingleton to step down over the bonus payment and his €27.6 million pension arrangements.
Irish Nationwide is preparing to report its annual results and they are expected to show losses of close to €500 million on the building society’s €12 billion loan book which has a heavy exposure to the collapsing property sector.
The amount being set aside to cover bad loans could push the society heavily into the red for 2008, which would increase the pressure on Mr Fingleton to step down before the society’s annual meeting in the coming weeks.
The Greens called for Mr Fingleton to step aside over his bonus, pension deal and management of Irish Nationwide.
