The Irish government has launched an investigation into how Michael Fingleton, veteran chief executive of the Irish Nationwide building society, was paid a €1m (£938,550) performance bonus. This was paid just weeks after Dublin guaranteed the society’s liabilities and those of all Irish financial institutions, amid fears of a run on deposits.

Brian Lenihan, finance minister, told parliament on Tuesday that he had asked the two directors appointed by the government under the terms of the guarantee, to investigate Mr Fingleton’s remuneration.

Mary Coghlan, deputy prime minister, called on Mr Fingleton to pay back the bonus.

“There’s not just a level of concern but a level of annoyance,” she said on Tuesday. “He has created a huge difficulty and I think the bonus should be paid back.”

The row represents the first serious challenge to the government over the rescue plan for the Irish banking sector, which is facing a surge of bad debts as property developers, and others lent money during the boom years, go bust as construction activity dries up and house prices fall.

The 71-year-old – known in Dublin by the nickname “Fingers” – has been at Irish Nationwide for 38 years, where in recent times he has transformed the company from a conventional building society into a specialist property lender, with 75 per cent of its loan book in commercial lending.

The row surfaces days after Mr Lenihan indicated he planned a crackdown on crony capitalism by tightening the rules on board representation to prevent a repeat of the scandals at Anglo Irish Bank.

Mr Fingleton was not contactable, but an Irish Nationwide official said the bonus had been agreed with the board in February when Mr Fingleton was persuaded to stay on, rather than retire.

He was the highest paid chief executive in Ireland last year with total pay of €2.34m, up from €2.31m in 2007.

Public anger increased with weekend revelations that Mr Fingleton is sole beneficiary of a company pension fund of €27.6m.

Get alerts on Banks when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Comments have not been enabled for this article.

Follow the topics in this article