AIB faces demands to recoup bonus

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The Independent Online

Allied Irish Banks is to come under pressure to demand the repayment of a $336,000 (£230,000) bonus paid to Susan Keating, the chief executive of US subsidiary Allfirst, last year.

The bonus, which came on top of her basic $600,000-a-year salary, was paid as a result of the profits made by Allfirst in 2000. However, an investigation into how foreign exchange trader John Rusnak lost $691m at Allfirst discovered that the profits for 2000 may have been overstated by as much as $200m.

AIB has said it will not pay bonuses to its senior executives for 2001 but has not said anything about the 2000 payments. The bonus paid to Michael Buckley, AIB's chief executive, is probably safe as he was then running the Polish business, and the then chief executive, Tom Mulcahy, has now retired.

The question of 2000 bonus payments is to be raised by investors at AIB's annual shareholders' meeting, which takes place in Dublin later this month.

Ms Keating has been the focus of investors' attention since the Rusnak scandal broke in February. Many expected her to resign when the report, by senior US banker Eugene Ludwig, was published last month.

Six AIB executives resigned and it is understood that her job is not entirely secure. Ms Keating has been told that she is on probation to turn Allfirst around or she may be forced out of the Maryland-based bank later this year.

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