LET me tell you the story of lucky old Eileen. Lucky Eileen landed a job last week. Not any old job, but a six-figure job.
It will carry all the bells and whistles of the financial sector. Her package would not humiliate a banker.
Eileen was not interviewed for the appointment. She was, somehow, assumed into it.
The job, despite being in the gift of a state agency, was never advertised.
Old Eileen will be boss of NewEra, the quango set up to manage the State’s assets.
Eileen Fitzpatrick was quietly appointed amid the fanfare about the launch of NewEra. Nobody seemed to notice.
The NewEra outfit will, somewhat unexpectedly, not be a stand-alone independent company. It will be a subsidiary of the NTMA, the empire-building state asset manager.
Funnily enough, Eileen worked for the same NTMA right up to the day when she was promoted to the new job. So there was no need for the empire builders to scour the globe for talent.
As so often happens in Ireland, they found the best candidate for the plum job just down the corridor.
As the director of NewEra, Eileen will control the Government’s Strategic Investment Fund, a quango mandated to reform how Ireland manages state companies and to safeguard the corporate governance of the semi-states. Eileen will be the supremo of the sale of state assets.
As there was no contest for the job, I wondered what epic talents does lucky Eileen possess that earn her a parachute into this goldmine?
I rang the NTMA. A public relations voice was offered. Would Eileen like to talk to me?
Perish the thought. Nothing like that happens in Ireland. State plutocrats pay outside voices to protect them.
Okay, so perhaps the external hired gun of the NTMA might tell me how much Eileen earns in the new job?
Not a chance. A point blank refusal, but I guess it is in the €300,000- to €400,000-a-year range. Plus a bonus.
Unfortunately, these guys still do not get it. The bad old ways are best for NewEra. They fail to understand that Eileen is working for a state agency. She should be accountable. She is paid a six-figure sum from taxpayers’ money. It might be helpful if she was willing to come out to play.
I should have known better. I would have to settle for the press release.
The press release pretentiously dubs this week’s heroine as “Dr” Eileen — a doctorate in chemistry not particularly relevant for a plant in a senior investment position. It mentions that she has been with the NTMA since 2006, not only as a director but also as the person responsible for Alternative Assets within the National Pensions Reserve Fund.
Pretty numbing stuff.
The next bit was more arresting. Eileen also happened to have been chief executive of AIB Investment Managers “and has worked in the financial services industry since 1987″. It also mentioned her “experience . . . in the stockbroking industries”.
The CV finished up by boasting that Eileen held the “role of chairman of the Irish Association of Investment Managers” — the IAIM.
My blood pressure began to rocket.
While claims to an AIB pedigree always agitate my antennae, references to the IAIM make me reach for the valium.
Hopefully Eileen did not squander too much of her career since 1987 sitting in AIB, the most controversial of all Irish banks. Was she a member of the AIB mafia?
She was. Of the 19 years since her PhD in chemistry, Eileen has spent 16 in the AIB stable. She took a couple of years’ break to work in NCB stockbrokers, but rapidly returned to the bosom of the second dodgiest bank in Ireland. While at AIB, Eileen was one of the best-rewarded investment managers in the country.
Presumably the NTMA top brass, who gave her last week’s gig, investigated her track record? Presumably they compared funds under her management with the performance of shares as a whole?
As Eileen was unavailable, I dug out the AIB Investment Managers pension fund management performance in the six years when she was top dog. It was far from sensational. But bravo, AIB pensioners did not actually lose money during her supremacy.
Indeed, according to Rubicon Investment Consulting, AIBIM gave them a return of 3.4 per cent per annum over that six-year span. Her performance was in line with those of her peers. Unfortunately, Ireland’s cosseted fund managers have an uncanny habit of charging similar exorbitant fees and returning equally pitiful results.
The AIBIM 3.4 per cent return seems superficially reasonable — but it is brutal compared with the ISEQ’s rise during those years. According to Rubicon, the annual return on Irish shares for that period was 11.2 per cent. Ouch.
AIBIM missed the Celtic Tiger Irish stock market boom. Pensioners would have been eight per cent per annum better off if they had ignored AIBIM and plumped for a basket of Irish shares. Nonetheless, Eileen was plucked out of AIB in 2006 and slotted into the senior layers at the NTMA.
I would love to have been able to ask Eileen about the poor performance of AIBIM during her period in charge.
But Eileen was not coming out to play.
I would also have loved to ask her about the loss of €153m suffered by AIB after it bought John Govett (the UK investment managers’ group) in 1997 and sold it at rock bottom in 2003. Eileen was a director of AIBIM throughout that period.
But Eileen was not coming out to play.
What a pity, because Eileen is another seasoned insider. She was in AIB with such noble names as Eugene Sheehy, Gary Kennedy and Colm Doherty. She could come before an Oireachtas Committee and offer useful insights into how our biggest bank went bankrupt.
In 2001, when she was in her heyday at AIB, she took the chair at the holy grail of all financial insiders. The chair of the IAIM put her right in the corporate governance firing line, as the IAIM is the self- appointed arbiter of corporate governance. It is a toothless tiger.
If I had been in the chair of the IAIM from 2000to 2003, I would bury the information. Only a blind insider would regard the title as a plus. This club of powerful, well-fed fund managers has made some extraordinary decisions. A year after Eileen departed the IAIM, Anglo’s chief executive, Sean FitzPatrick, seized the chair at the bank, contrary to corporate governance guidelines.
The IAIM was starstruck, cravenly declaring it “understands the company’s rationale for making the appointment”. The fund managers let Sean through the hoops. A few years later he was forced to resign.
In 2007, the same insiders of the IAIM cleared Jim Flavin to become the all-powerful executive chairman of DCC for “a transition period”. A year later he was forced to resign.
It is the same old story. The NTMA, masquerading as detached from private sector greed, has confirmed its status as the ultimate insider by this appointment.
Last year, its boss, John Corrigan, made much fuss of reducing his salary to a mere €40,000 a month and waving his bonus, a similar level to the outrageous salary offered for the position as AIB chief .
Hardly surprising. John, like Eileen, was once director of AIBIM. They come from the same stable. They understand these things.
Has anything changed?