Seán FitzPatrick: Investors 'shouldn't interfere in his share option schemes'

Former Anglo Irish Bank chairman Sean FitzPatrick dismissed shareholder concerns about his move up from chief executive in 2005 as "interfering in his share option schemes", according to the Irish Association of Investment Managers (IAIM).

Institutional investors pressed FitzPatrick at the time to appoint an independent vice chairman to improve the bank's governance standards, but he dismissed their concerns by saying they "shouldn't be interfering in his share option schemes if they only held 3%-4% of the bank", according IAIM chief executive Frank O'Dwyer.

"The local funds were of the view that it was inappropriate for the chief executive to become chairman," said O'Dwyer. "The reality was the big shareholders from the US were happy with the team as it was."

With backing from American institutions, FitzPatrick held his ground and appointed David Drumm his successor. Both men resigned from Anglo in December 2008 as the bank collapsed.

Anglo, which will need up to €34bn in recapitalisation funds according to Department of Finance projections, is expected to begin its wind-down process by the end of March. The National Treasury Management Agency (NTMA) appointed an internal candidate early this month to oversee the restructuring of Anglo and Irish Nationwide by the EU/IMF-imposed first-quarter deadline, according to a senior industry source. No decision has yet been made on how the wind-down will be achieved, the source said.

Last year the European Commission rejected an Anglo plan to split itself into good and bad banks. Chairman Alan Dukes has suggested Anglo could serve to warehouse assets to help other banks shrink their balance sheets.

The Department of Finance and NTMA tried to extend deadlines for bank recapitalisation and sector-wide restructuring until May in a 'huge push', but were rebuffed by the Central Bank and the bailout 'troika' of the EU, IMF and European Central Bank, according to senior industry sources.

The department argued that major decisions about the banking sector that could be postponed should be left to the next government, but the troika was "absolutely unyielding" on the first-quarter deadline, one source said.

A Department of Finance spokeswoman had no comment except that the terms of the bailout memorandum of understanding remained in force.

The department also wanted to allow until May for Bank of Ireland to raise enough capital to meet new Central Bank requirements, but were again rebuffed according to an institutional investor source.

The Central Bank said its February deadline for Bank of Ireland remains in place.