Saturday, November 21, 2009

Economics 21/11/2009: State Directors Fees

Per RTE report (here), Anglo's 'Public Interest' directors are being paid handsomely for their gargantuan efforts to... do exactly what? Steer the bank out of trouble? Not really, Anglo is not any better today than a year ago. Carry out its ordinary business? Not really, Anglo is not doing any new business at all and is in effect sitting pretty until Nama cleans up the mess. Safeguard public 'investment'? Not really, for no one sane really expects any return from this 'investment'. So what exactly do these 'Public Interest' director do? No one dares to ask. 

In the mean time, Alan Dukes and Frank Daly - two, in my view fine individuals - collect public retirement pay and are receiving €99,360 each in fees from a publicly-owned Anglo. A figure more than six times the compensation for directors of other State bodies.

But things are not much better in BofI (where Tom Considine and Joe Walsh received total fees to €102,375 and Joe Walsh's to €78,750). AIB in contrast paid Dick Spring and Declan Collier €27,375 and also topped these with €3,000 for each committee meeting attended. IL&P's public guardians, Ray MacSharry (fees of €56,250) and Margaret Hayes (€63,500) were handsomely well off as well. At EBS, Tony Spollen and Ann Riordan both receive a basic fee of €29,000 each. State appointed noble folks of Nationwide, Rory O'Ferrall and Adrian Kearns, in line with a long-running tradition at the building society to behave like a secretive private bank, simply didn't disclose their earnings to the public.

Further irony: fully state-owned Anglo pays second highest rate to its non-execs, while the Irish Government is flustered with privately held banks (AIB & BofI and the rest of privately held 5) executives' remuneration. It looks like someone (Minister Lenihan?) can't control his own organization (Anglo), while trying to play tough with organizations he has little stake in. Oh, incidentally, the fees for Dukes & co were set on the 'recommendation' by the State own 'commission' - another state body that Minister Lenihan apparently cannot reign in.

Expected annual cost (inclusive of expected, but not disclosed fees) €760,000 plus.

After having a quick chat with few friends in academia, here is a bold proposal for the Minister for Finance - you can find at least 12 senior and experienced academics and industry practitioners, including my self, who would do these jobs for €10,000 per annum plus expenses. As a real exercise in our patriotic (Minister Lenihan's words from last Budget) duty.

How about it, Minister? You promise left right and center that you will save taxpayers money. Here is a chance to do so. Some €640,000 of taxpayers money!

Oh and while we are on the topic of silly/dodgy political news - there is a recent report in the US (here) that argues that President Obama evokes Jesus and God more frequently than his predecessor. Not that I have a problem with this myself, but I wonder what all the European 'Liberals' would make of this...

1 comment:

Cearbhall O Dalaigh said...

What a pathetic response by the government to a situation which gets worse by the day.

Here we are, over a year after the bank guarantee was announced and there is no regime change at the banks. AIB and BOI both appointed insiders as CEO’s and 75% of the boards are intact.
The government appointed directors, who were supposed to be looking after the taxpayer’s interest, now seem to have taken on the job of bank shills.

I saw Alan Dukes on Questions and Answers one night droning on and on as only he can and stoutly defending any issue which arose in relation to Anglo.
He was actually extremely rude to a senior counsel on the same show who was far too polite and timid, sensing this Dukes began to throw his new found “I’m a bank director you know” persona about.

Dukes seems to be anybody’s these days, I saw him on another TV show recently lobbying for the horseracing industry.

Dick Spring was then told last weekend to go out and earn his cheque by ‘confirming’ that AIB had done an exhaustive worldwide search for an outside CEO, to no avail.

It’s laughable to listen to commentators telling us that the banks must pay top dollar to get the best talent.

We saw what the ‘talent’ did; they destroyed the wealth of some of the most valuable businesses in the country.
Both Goggin and Sheehy ran their respective companies into the ground and walked away with millions. As did the high priced so called ‘talent’ in many of the other banks.

Things are looking bad for Ireland, due mainly to vacillation on the part of government.