When the succession race to replace Eugene Sheehy began five months ago, Colm Doherty would have expected to have more than an evens chance of securing the top job at AIB, at his second time of trying.
Now, with a deadline looming – even if that decision is to put the decision on a long finger – finance minister Brian Lenihan has to decide whether to veto Doherty – the insider of insiders – or to look anew at one of the external candidates, including half a dozen executives working in North America who pitched for the job.
Senior people inside AIB – and a few outside – who favour Doherty to take over have stepped up the campaign on his behalf in recent days. They argue that AIB without a chief executive would also be without a finance director and point to the appointment of banking insider Richie Boucher to head Bank of Ireland as a precedent.
But whether or not they succeed in getting Doherty – a main board director for the past six years and head of AIB's capital markets division for nine – over the line has turned into one of the most fascinating dramas in an already dramatic year since the bail-out of Irish banking.
Doherty is now portrayed as the insider-in-waiting, the top tip to take over the top job. But Doherty's supporters, who describe the situation as politically "messy" face a huge hurdle.
The Greens, facing a special conference next month on Nama have set out their stall, and unlike Bank of Ireland's appointment of its insider, has decided to bring the appointment of the new AIB boss into the political arena.
"The appointment of an internal candidate would send out the wrong signals," said Dan Boyle, Green finance spokesman. And in case there was any doubt at all over the message, Boyle, who is looking for a "cleaning up" of the culture and people on the banks' boards, repeated: "It would be a wrong decision to go for an insider." The AIB succession not only involves the deep dark waters of AIB's corporate past but also who should be seen to be held responsible for the implosion at Ireland's largest bank after its reckless lending to a small group of property developers.
In other words, Lenihan who was able to approve Boucher at Bank of Ireland before political passions were raised over Nama, may find it politically impossible to appoint any insider to run AIB. It is not fanciful to suppose that the appointment could become entangled with the debate over the Nama legislation in the coming weeks.
Last month the government approved an outsider – Australian banker Mike Aynsley, who was brought to its attention by ex-Bank of Ireland chief Mike Soden – to head Anglo Irish.
To say that the appointment of the new boss at AIB should not be a political issue is missing the point. It is a political issue because taxpayers control the bank. AIB, since benefiting from last year's deposit and bond guarantee, was slow to admit to shareholders and taxpayers the extent of its bad property loans. Less than a year ago the bank was making us believe that it could get through losses.
The number of candidates chasing the job also shows that many believe it is still worth securing, despite the €500,000 pay cap.
The succession race launched in April was like no other. Doherty, 50, after losing out to Sheehy in the last race for the top job, had an additional incentive to secure the job this time.
The stakes are high, for it is difficult to see how AIB, shrunken after Nama, can continue to justify running a large capital markets division across town in the Dublin docklands away from its D4 head offices. AIB critics say capital markets was run as a semi-independent fiefdom. A large capital markets operation is not required to find a buyer for its stake in M&T Bank in the US, as AIB attempts to avoid returning to the taxpayer for more cash on top of the €3.5bn it has already received.
Doherty has for years been the second-best-paid AIB executive in Dublin, making him one of the best-paid in the country and, for the size of the bank, among the best-paid in western Europe.
He joined AIB in 1989 and was the protegé of Michael Buckley, the former chief executive who also secured the top job after leading the capital markets division. In 2003, Doherty was appointed to the main board. As the boom expanded, his pay packet ballooned. In 2005, the year he lost out to Sheehy, Doherty was paid €1.5m, including a €900,000 bonus. The following year his pay, with a €1.2m bonus, had ballooned to just short of €2m, not much less than the €2.4m paid to the top boss Sheehy.
According to internal critics, AIB has behaved in the past decade as if it was some sort of global banking giant. Buckley sanctioned the purchase of John Govett, the London fund manager with operations in Singapore, for stg£101m in 1995. After eight difficult years, and with losses mounting, AIB was forced in 2003 to write off almost the whole book value of Govett when it sold out to Gartmore.
The coming weeks will decide whether Doherty can pull off the biggest deal of his career.
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