A general question about the AIB sale and leaseback arrangements for HQ and various premises. Were these finance leases or operating leases? I had understood them to be operating lease only, thereby representing a real profit. I’m studying financial regulations at the moment and am getting a better understanding of the substance of these transactions, hence the question.
What’s the difference with a finance lease?
To answer your question with another question, is it possible that they are structured to appear as one, but are really the other? ‘Inventive’, eh?!
They wouldn’t be the first one’s to be creative, hence the development of the standards. Although espoused standards and standards in practice are very different things and I am but a lowly scholar.
A finance lease is a means of raising finance with the asset as security, the substance of the transaction is that the property never changes hands. An operating lease is where the property and the associated risks and rewards pass to the lessor (buyer). At the end of the lease term the lessee (seller) will own the property under a finance lease, but under the operating lease they walk away empty handed.
Just caught the end of the VB show on tomorrows Times headline is AIB managing director paid €3MILLION in 2010 Didnt catch the name but I need to lie down
Colm Doherty. The boys at the top didn’t get the memo.
Performance-related pay no doubt.
Worth every penny. They got 3.5 billion in bailout money in 2010. He took less than 0.1%
On the RTE news website:
"Former managing director of Allied Irish Bank Colm Doherty is reported to have received a pay package of more than €3m last year after stepping down in November as a condition of the State’s second bailout of the bank.
Mr Doherty’s pay was made up of a salary, from January to November, of €432,000.
In place of a years’ notice, he was paid €707,000, when his contract was terminated at the direction of former finance minister Brian Lenihan.
He was also paid about €2m instead of a contribution to his pension.
In its own defence, the Department of Finance says it did not sign off on this payment, but that the package was what Mr Doherty was legally entitled to, under the terms of his contract.
His appointment to the position of managing director in 2009 was controversial, as it went against the former government’s commitment to change at senior executive level at the banks"
So, let me get this straight:
basically this guy gets fired for  doing a crap job (whatever). But ease the passage of the medicine his is given over 3,000,000 € (looks bigger than 3 million).
And he gets away with this.
And he is one of many…
Now go listen to this item on the plight of patients in our hospitals and seethe like I did.
rte.ie/podcasts/2011/pc/pod- … 503528.mp3
PS, yes, yes it IS uncle Joe, but is there any other platform that the PP of I can air their genuine hardship stories?
Don’t forget that Lenihan intervened to prevent Capital Markets staff from getting bonus payments which a judge said they were entitled to.
Maybe I’m misunderstanding the time lines but, irrespective of whether they signed off on the actual payment, would the Department of Finance not have had to sign off on the employment contract in 2009 which made the payment a legal requirement?
How did he get 707,000 in lieu of a year when his annual salary was 500,000?
Don’t tell me they’re making up the tax to him?
Its not news that Doherty raped the taxpayer. What I find interesting is that he took it in a lump sum instead of the annuity which might (actuarially speaking) have been more valuable. So did a lot of senior civil servants who retired recently. The best explanation I can think of is that a lump sum is much easier to take to Spain when income tax goes to 65pc here and wipes out the after tax value of the annuity.
Well, not Spain obviously, nor Greece, nor Portugal …
What is the German taxpayers view on this latest development?
I’m sure someone will check out reports in the German media. In the meantime Doherty’s bonanza has been reported in le Figaro in France;
lefigaro.fr/flash-eco/2011/0 … patron.php
Basically lifted from the IT article
It also says"
Une somme qui “dépasse l’entendement”
Le principal syndicat du secteur bancaire, l’IBOA, s’est offusqué de cette somme qui “dépasse l’entendement”, selon son secrétaire général Larry Broderick. De son côté, le ministre des Finances Michael Noonan a affirmé que ce paiement était un “héritage” légué par l’ancien gouvernement de Brian Cowen, aux commandes jusqu’au début de l’année, et a assuré que le nouveau gouvernement dirigé par le centriste Enda Kenny allait “faire le ménage” dans ces pratiques.
Translation: Larry Broderick of the IBOA is frothing at the mouth. Noonan says 'Not our fault - the previous government landed un in this S$%t. Inda promises to do some housework regarding these practices.
Is there NO way of prising the money back of this guy and the many other of his ilk?
Still the main story on the Irish Times website now updated with Lenny’s contribution
So Lenny takes credit for limiting this feckless waster’s salary to 500k!!! Again that is 500k. Your such a hero Brian and look he tries to pin the appointment on the public interest directors, what a creep.
So when Bank of Ireland don’t manage to raise the private capital required to keep it out of majority state ownership and Boucher is moved on are we looking at another multi million euro pay off for a failed banker based on the existance of “pre-existing contractual obligations”.
I’m not amused.
As the saying goes a bird in the hand is worth two in the bush. So best explanation that I can think of is that he reckons there wont be any money left to pay future annuities
Well if that does not start a bank sprint …what will?