An­tho­ny Wil­son

The board of state-owned bank First Cit­i­zens ap­proved the pay­ment of $10 mil­lion to its de­part­ing chief ex­ec­u­tive of­fi­cer, Lar­ry Howai, two days be­fore Prime Min­is­ter Kam­la Per­sad-Bisses­sar an­nounced that Howai would be the coun­try's new Min­is­ter of Fi­nance-a job that gives him as Cor­po­ra­tion Sole over­sight of all state-owned com­pa­nies, in­clud­ing First Cit­i­zens.

The pay­ment to Howai, who took ear­ly re­tire­ment from the bank ef­fec­tive June 24, is over and above the pen­sion and gra­tu­ity that he is en­ti­tled to re­ceive as an em­ploy­ee who worked for 32 years at the bank and its pre­de­ces­sors, Na­tion­al Com­mer­cial Bank and Work­ers' Bank (1989) Ltd, said the chair of First Cit­i­zens, at­tor­ney Nyree Al­fon­so.

She said: "The pay­ment is in recog­ni­tion of his ex­cep­tion­al ser­vice to the or­gan­i­sa­tion as well as for the ben­e­fit of the bank in terms of at­tract­ing and re­tain­ing the best per­son­nel who would be as­sured that they too would be re­ward­ed if they give long and mer­i­to­ri­ous ser­vice to First Cit­i­zens." Asked if the $10 mil­lion was an ex-gra­tia pay­ment, Al­fon­so re­sist­ed the use of the term, which refers to a sum of mon­ey paid when there is no oblig­a­tion or li­a­bil­i­ty to pay.

But she ad­mit­ted: "We were not un­der an oblig­a­tion to pay, but de­cid­ed to pay the sum based on prece­dent and our abil­i­ty un­der the Com­pa­nies Act to make such a pay­ment." Al­fon­so said all of the $10 mil­lion was based on in­ter­nal prece­dent, from cal­cu­la­tions go­ing back to 2005, of what three se­nior man­agers who left the com­pa­ny re­ceived.

Based on his salary at the time of his de­par­ture and his 32 years of ser­vice, the for­mu­la used to cal­cu­late the con­sid­er­a­tion to Howai was not in any way dif­fer­ent or pref­er­en­tial than that re­ceived by se­nior man­agers de­part­ing from the bank in cir­cum­stances which were not dis­sim­i­lar to his, she said. The de­ci­sion was tak­en by non-ex­ec­u­tive di­rec­tors of the bank on­ly, with two di­rec­tors re­cus­ing them­selves.

The mat­ter was first dis­cussed at a board meet­ing on June 11 but that meet­ing was ad­journed pend­ing the re­ceipt of le­gal ad­vice, which was sought and re­ceived from Rus­sel Mar­tineau, SC. "The fi­nal de­ci­sion, which was tak­en on June 20, was based on both the prece­dent and the ad­vice re­ceived from Mar­tineau," said Al­fon­so. The Prime Min­is­ter reshuf­fled her Cab­i­net on June 22.

Al­fon­so con­ced­ed that the pub­lic per­cep­tion of the $10 mil­lion pay­ment "might be awk­ward," but she main­tained that she "would have made the pay­ment had he re­ceived an­oth­er port­fo­lio. I will take the jabs for say­ing that I was try­ing to pla­cate the new boss. It does look a lit­tle awk­ward but on­ly be­cause of the port­fo­lio he as­sumed."

Asked whether the de­ci­sion had the ap­proval of Cor­po­ra­tion Sole, which owns 97 per cent of the shares in First Cit­i­zens, Al­fon­so said the role of a board of a state-owned com­pa­ny is over­sight and gov­er­nance. "As a mat­ter of gov­er­nance, I don't need the line min­is­ter to di­rect me on an is­sue like this, nor would I have tried to seek such ap­proval in these cir­cum­stances," she said, adding that as the chair of a state-owned com­pa­ny, she does not take day-to-day in­struc­tions from the Min­is­ter of Fi­nance, but that that re­la­tion­ship is gov­erned by checks and bal­ances. Ef­forts to con­tact the Min­is­ter of Fi­nance proved fu­tile up to press time.