Wednesday, November 23, 2022

Gordon Deegan

Pay to ‘key management personnel’ at Goodbody Stockbrokers more than doubled to €8.1 million last year.

New accounts for Goodbody Stockbrokers UC show that key managers at Goodbody enjoyed the aggregate 118 per cent increase in pay to €8.1 million as a result of once off ‘other payments’ of €3.173 million.

The exceptional €3.17 million pay out to key management personnel contributed to pre-tax profits at Goodbody last year declining by 42 per cent from €5.5 million to €3.17 million.

Revenues at the stockbroking firm last year increased by 9 per cent to €79.2 million, made up of €75.93 million from contracts with customers and €3.26 million in trading income.

In September 2021, AIB completed the purchase of Goodbody for €138 million, including the stockbroking and wealth management group’s €56 million of surplus cash, in a deal that would protect bonuses for staff of the securities firm.

The group has offices in Dublin, Cork and Galway, along with a branch in the UK.

The overall €8.1 million pay to key management personnel last year was made up of salaries of €4.4 million, ‘other payments’ of €3.17 million, pension costs of €201,000 and directors’ fees of €320,000.

Directors’ pay

A number of directors at Goodbody are included in key management personnel, and directors’ pay increased more than three-fold to €4.68 million largely due to once off ‘other payments’ of €2.68 million.

The directors state that excluding a €3.6 million cost concerning the sale to AIB, Goodbody Stockbrokers UC’s underlying pre-tax profits last year increased by 11 per cent.

The firm’s fee income last year increased by 34.5 per cent from €32.2 million to €43.47 million while commission income reduced by 8 per cent from €25.89 million to €23.89 million.

The business’s ‘other income’ also decreased by 7 per cent to €8.56 million.

Numbers employed at the business last year increased from 316 to 327 as staff costs increased from €39.92 million to €46.47 million.

The directors state that investment banking experienced a strong out-turn with year-on-year revenue growth from trading, commission, research and corporate advisory fees.

The business’s wealth management business also experienced strong growth in funds under management while the Goodbody Asset Management business continued to grow with assets under management increasing significantly during the year.

The directors state that the funds delivered a very strong performance in 2021 with all funds at or well ahead of their respective benchmark.

Directors last year purchased and sold securities to the value of €1.1 million through the company on normal stock exchange settlement terms.

Alleged contravention of regulations

Concerning the firm’s contingent liabilities, a note states that the Central Bank notified the firm in January of this year of its decision to commence an investigation into alleged contravention of market abuse regulations.

The note states that this followed the Central Bank issuing correspondence to the industry in January 2020 and July 2021 relating to industry wide deficiencies in market conduct risk identification, market abuse trade surveillance systems and market abuse compliance frameworks.

The note states that the purpose of the Central Bank investigation at the firm is to gather sufficient information to determine whether a contravention has been committed.

The note adds that “the steps taken to date do not involve any conclusion that there has been a breach of the law by the company or its officers”.

“Given the early stage of this process the outcome here is uncertain,” the note concludes.

At the end of last year, the firm had shareholder funds of €83.82 million that included accumulated profits of €73.1 million.

The firm’s cash funds increased from €75.1 million to €88.43 million.

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