Tuesday 19 September 2017

Even if the cap fits, bankers are less than keen to wear it

THE Punt has picked up a whisper that the 'cap' on bankers' pay could be up for review. If true, it will go some way to softening the blow after bankers were left reeling from this week's blistering assault by the Central Bank's Fiona Muldoon.

That is of course unless the review finds Ireland's banking elite are already paid too much. Since the financial crash, the State has set a pay cap for anyone running a bailed-out bank at €500,000 a year, though it has been honoured more in the breach than in the observance.

AIB's David Duffy, and Jeremy Masding of Permanent TSB both signed up to just such packages last year, but experience at the other lenders shows banks can be creative when it comes to finding ways around the cap.

Partially state-owned Bank of Ireland's pugnacious chief executive Richie Boucher was paid €831,000 last year, despite a 'core' salary of €500,000.

The head of the former Anglo Irish Bank made even more. Australian Mike Aynsley, who runs Irish Bank Resolution Corporation (formerly Anglo), actually made €866,000 last year, again despite a 'core' salary of €500,000.

Backers of the cap argue it is madness paying big salaries to a sector that has cost the State a ruinous €64bn.

There is a growing body of opinion, however, arguing the country needs to pay up if it wants to attract the best talent to run the banks, which raises the intriguing question of whether a review might be prompted by the expectations of any upcoming vacancies.

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