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AIB Wimps and Cute Hoors

Posted on: May 2nd, 2010

Last Wednesday I set out for the AIB agm. The shareholders were mostly the usual pensioners, battered by the hardship inflicted on them by the bank they once trusted.

Nothing had changed on Wednesday, although AIB chairman Dan O’Connor is far softer on the surface than his predecessor Dermot Gleeson. First he listens with concern to the small shareholders. Then he rams the resolutions down their throats with his proxies.

O’Connor is one of the dullest wimps ever to hit the banking world. Shareholder challenges to Dan remind me of Joe Higgins’ famous description of his jousts with Bertie Ahern as “playing handball against a haystack”.

I was not interested in taunting Dan. He would send an insomniac to sleep faster than a dozen valium.

Nor was chief executive Colm Doherty in my sights.

Although I am no fan of Colm’s, it would have been wrong to harangue him at the agm.

Unknown to many at the 500-strong meeting, Colm had buried his father, former garda commissioner Eamon Doherty, a day earlier.

So, banker or not, it was inappropriate to aggravate his bereavement. Colm endured the ordeal with dignity.

Apart from Dan and Colm — who both sat on the platform — the other directors were invisible.

AIB always hides its directors in the front row at its Ballsbridge agms.

So my eye wandered to the front row to note the presence of the directors we were being asked to re-elect. Not easy, because AIB always positions them to ensure that shareholders can only see the backs of their heads.

The first recognisable back-of-the-head was not one which was up for re-election. It belonged to Declan Collier, a ‘public interest’ director. Declan was more familiar than the rest, partly because he was all over Wednesday’s news for all the wrong reasons, and partly because he sports a rather well-manicured beard.

Declan doubles as chief executive of the disastrous Dublin Airport Authority (DAA). He had hit the headlines on AIB’s AGM day after his little dinosaur had reported awful 2009 results.

The DAA had lost €13m in 2009.

It is difficult to fathom how a state airport monopoly operating on an island can lose money, but Declan’s DAA managed it. Borrowings rocketed while turnover was down.

Declan was not up for re-election because he is appointed by government.

When I eventually spotted his grey beard, he was in a huddle with the other ‘public interest’ director, Dick Spring.

Neither of these guys, nor any of their colleagues in the front row, uttered a word at the five-hour meeting. Instead, they all sat on their backsides looking important in their reserved seats, never held accountable.

Declan is hardly giving the DAA good value sitting on his backside for AIB for five hours.

Indeed, Declan seems to spend a lot of time sparing the DAA from his talents.

He reserves plenty of working days for AIB.

Which is probably pretty good news for the DAA, but very understanding of the board, as he is drawing €568,000 for slaving away at the airport monopoly. Not far below Colm Doherty’s drawings from AIB.

Part of Declan’s massive 2009 salary was awarded as a “performance-related” bonus. Not a bad perk when the airport authority lost money. Imagine how much more he will trouser if it ever again makes a profit.

Declan should be working for a bank.

He is.

According to the AIB annual report, Declan was a conscientious attender at bank board meetings. He was present at nine out of 10.

Furthermore, the board held “27 additional out-of-course other meetings and briefings, and a full-day seminar focusing on issues of strategic importance” — not to mention the all-day AGM.

Even more fascinating is the news that Declan is paid an extra fee for his membership of the AIB remuneration sub-committee.

What a stroke of genius by the AIB board, to install a guy with a €568,000 package from another ailing outfit to its sub-committee on bankers’ pay. Declan hardly spends meetings thumping the table about excessive performance bonuses for top bosses presiding over failing businesses.

Declan seems to spend a fair amount of his working life down at AIB. Assuming that each AIB board meeting takes a full day, that he spends half a day preparing for it and that he fulfils his duties on the other 27 AIB board get-togethers , Declan takes a big bite out of the time coveted by the State monopoly where he is rewarded with €568,000.

It would be interesting to hear if the DAA’s new chairman, David Dilger, is happy with the distractions indulged by Declan.

How on earth was Declan picked by the Government for a seat on the AIB board? What hidden gems of genius do he and Dick Spring possess?

Declan and Dick are well-qualified for AIB. They are cute hoors. Neither of them have bought a single share in AIB since their appointment in January 2009.

What a wise investment decision. But does the State need directors who take €28,000 a year from its shareholders yet cannot spare a fraction of it to share their pain?

Declan and Dick are in good company. Anne Maher, a director who stood for re-election last Wednesday, earned €96,000 from AIB last year. In 2008 she topped even that with €128,000. That’s over €200,000 in two years. Yet, Anne holds just a pitiful 1,600 shares, currently worth only €2,000. Another cute hoor.

Good thinking, Anne, stay on for the boardroom loot but never waste much of it on the shares. Anne was re-elected by an overwhelming majority last week.

Another cute hoor on the board is Stephen Kingon. Stephen has earned €250 000 from AIB in the last two years but only holds 4,500 shares currently valued at €6,500.

He was a shoo-in for re-election.

None is as cute as Kieran Crowley, the Dyno Rod chief on the AIB board. Kieran holds a larger number of shares than either Dick (zero), Derek (zero), Anne (€2,000 worth), and Stephen (€6,500 worth). Kieran holds 12,500 shares (now worth €18,000).

But revealingly, Kieran has been swimming around in the AIB pipes since 2004.

In the last two years alone he has earned over €300,000 in fees.

Down at Dyno Rod, they do not muck about with bank shares. Again, Kieran’s re-election was given overwhelming support courtesy of the chairman’s proxies.

To be fair, there is at least one AIB director who bought shares in bulk in recent years.

Sean O’Driscoll, boss of Glen Dimplex, holds 138,000 AIB shares (currently worth €200,000). Sean was the odd man out in AIB. He refused to take any fees from the bank last year and earned €67,000 in 2008. He had a 100 per cent attendance record at board meetings.

Presumably, Sean was re-elected by acclamation?

Unfortunately, the Glen Dimplex supremo decided to leave the board after the AGM.

AIB is now entrusted to the gentle care of Collier, the semi-state plutocrat, Crowley the Dyno Rod man, and to the stewardship of the well-heeled old guard who failed to cry ‘halt’ during the property madness.