Fingleton’s little people savage rebels
Sunday Independent April 27 2003
‘YOU should have a prostate job,” advised Charlie, the uniformed commissionaire at the Burlington Hotel, Dublin 4, unhelpfully.
I had just surfaced from the tedious AGM of Irish Nationwide, visibly drained. Charlie asked me how the meeting had gone. I muttered a few words about how tediously tiring the skirmish had been.
His cheerful solution for my exhaustion was “a prostate job just like Alan Greenspan”. A bit extreme for AGM fatigue, but Charlie himself had recently volunteered for one and started to regale me with the finer details of his consequent bodily revival.
Not very welcome advice to a flagging 53-year-old; but far more practical than most of the embarrassing nonsense spoken by Brendan Burgess and others of his gang at the Irish Nationwide meeting, billed as the exit of the society’s boss, Michael Fingleton.
After the flop last Thursday, the deflated rebels should top up with Viagra as a reinforcement, or opt for Charlie’s prostate job.
The meeting ended in triumph for the man branded an autocrat. The extent of the boss’s victory – five to one on a motion of confidence – was stunning, considering all the bad publicity and tales of woe peddled about him.
Yet the outcome was puzzling. How could a group of malcontents emerge so badly scarred from a members’ meeting?
The trouble with the rebels was that they were profiteers posing as philanthropists. The rebels want the loot.
Their determination to hasten the sale of the society forced them to parade trophy victims at the AGM. Every hard luck story was told. Members who had not repaid their loans were wheeled out as victims, not defaulters. They lambasted Fingleton for behaving like a businessman, not a benefactor.
Simultaneously they wanted a share flotation, the proceeds of his success, in the form of a €7,000 payout per member. The lads were invoking Vincent de Paul to enrich themselves. Not a bad trick, if you can get away with it.
But Burgess’s gang didn’t. This was no meeting dominated by fatcat bankers with millions of proxies. It was the little man and little woman’s day out. Every borrower and lender had one vote. And the little people turned against the rebels despite all the pre-AGM hype.
Fingleton’s stewardship can be criticised.
Sure, he needs more heavyweights on the board. Sure, he has been overzealous in his pursuit of defaulters.
Sure, he earns an awful lot of money (€835,000). Sure he has been less than transparent.
But Fingleton, for all his faults, has delivered the only thing that matters in business: profit.
The rebels desperately needed losses as ammunition to fire at their target. At the same time they wanted profit to line their pockets.
There were two turning points in the meeting.
The first was when independent director Con Power spoke up for Fingleton. Con Power – who, when he was a member of Albert Reynolds’s kitchen cabinet, was sometimes wittily dubbed as ‘all con and no power’ – dismissed Burgess’s claim that there was an untoward error in the accounts.
Power, an accountant , convincingly reassured the little people in the audience that a €9 million adjustment in the profit and loss account was not due to an error, but was merely a timing matter. The society had prudently provided too much for bad debts in the past, incurring a tax liability in later years.
The board was suddenly revealed as having an articulate voice, a man equipped to take on Fingleton, the guy dubbed a dictator, if necessary.
Where were the promised stuffed dummies on the five man board? Michael Walsh, the chairman, was skilful. Dermot Desmond’s right-hand man allowed the rebels to drone on for hours, eventually boring the audience to
As Burgess rose to raise yet another tedious point – after three-and-a-half hours of tedium already – the second key moment occurred.
One of the little people rose to his feet and turned on him. To loud applause he accused the leader of the dissidents of a “filibuster”. At that moment the game was up and it was all downhill for a rebellion without a cause.
Instinctively, many of us go to AGMs with a sympathy for the voices from the floor. In the case of Eircom, First Active, Smurfits and the big banks, the top table was enriching itself while small shareholders were losing vast sums of money. The big battalions were scratching each others’ backs, casting millions of pensioners’ votes in favour of their chums on the podium.
In the Eircom shareholder rebellion, the 4,000 small shareholders in the hall were almost unanimously against the board. In the Nationwide’s case, on Thursday, the average member soon saw the rebels as a threat to their society’s continued success. Fingleton, despite all his abrasiveness, was delivering small riches to them.
‘After the flop last Thursday, the deflated rebels should top up with Viagra as a reinforcement, or opt for Charlie’s prostate job’
In the only show-of-hands vote at the meeting the board won by an overwhelming number.
The punters knew that Fingleton’s salary was too high. But they also knew that figures produced by the Nationwide under his leadership are staggering.
When he took over in 1972, profits were €44,000. Today they are €97 million. Assets were €5.5 million. Today they are €5.5 billion. The cost-to-income ratio was 53 per cent. Today it is 22 per cent. Reserves have risen from €210,000 to €4.3 billion. Branches are up from one to 50. Staff have jumped from seven to 400.
Hardly a good case for dismissal.
Next year, profits are set to rise to €100 million for the first time. Next year, legislation is due to allow Fingleton to sell the society to a big bank.
If that happens, every qualifying member will reap a reward of maybe as much as €7,000.
It was a classic example of how not to challenge a board of directors. Real reforms had already been conceded. The wrong target was now being picked at the wrong time. As the meeting progressed, the punters turned against the rebels.
They had blown it.