The Workers’ National Commission (CNT) of Novo Banco has raised concerns after revelations of 1.1 billion euros in bonuses to Lone Star executives and managers following the bank’s sale to the French group BPCE. In a statement titled “They eat everything, they eat everything and leave nothing behind,” quoting Zeca Afonso’s song ‘Os Vampiros,’ the commission contacted the management to inquire about potential extraordinary bonuses for employees.
CEO Mark Bourke and Chairman of the General and Supervisory Board Byron Haynes reportedly responded that last year’s bonuses were deemed sufficient, according to the CNT.
“The question arises: And what about the members of the Executive Board and the General and Supervisory Board? Didn’t they also receive salary improvements vastly superior to those of the workers and bonuses almost 70 times higher? The annual report confirms that these remunerations were indeed substantial,” the statement adds.
The CNT argues that it was due to the dedication of over 4,000 employees that Novo Banco underwent restructuring, enabling the June sale for 6.4 billion euros. The commission announced an upcoming petition demanding bonuses.
“Faced with this tremendous injustice, the CNT will not be appeased and will undertake initiatives to ensure workers receive, at the very least, a bonus of two months’ salary, representing about 25 million euros — merely 2.27% of the 1.1 billion to be distributed. A crumb of the large cake,” states the release.
Novo Banco was established in 2014 to assume part of the banking activities of BES (following its resolution), owned by the public Resolution Fund.
In 2017, the majority stake was sold to Lone Star, with an agreement that the Resolution Fund would inject 3.405 billion euros into the bank over the coming years, inciting several political and media controversies.
The early end of this mechanism by the end of 2024 paved the way for the bank’s sale and dividend payments.
The sale to BPCE for 6.4 billion euros was agreed upon in June. Novo Banco is 75% owned by Lone Star, with the remaining 25% owned by the state (11.46% by the Directorate-General for the Treasury and Finance, and 13.54% by the Resolution Fund).
The government stated that the sale of Novo Banco, combined with this year’s dividend distribution, allowed the state to recover almost 2 billion euros of the public funds injected into the institution.
In September, it was reported that executives of Lone Star and managers of Novo Banco were set to receive bonuses totaling 1.1 billion euros from Lone Star in recognition of the successful sale of Novo Banco.
The Resolution Fund and Ministry of Finance were contacted to ascertain their awareness and whether they considered that a potential conflict of interest might arise from a shareholder (Lone Star) awarding bonuses to independent managers of Novo Banco. However, no responses have been received to date.
A recent report revealed that Novo Banco proposed a one-time salary supplement to 700 employees to resolve a long-standing dispute related to credit cards initially provided by BES as a salary supplement, which were later revoked.
Employees who no longer received these benefits have insisted that the amount be fully paid, categorizing it as income.
Novo Banco’s proposal involves paying 50% of the past value to settle any future liabilities, including the employee agreeing not to pursue legal action.
