Bank of Ireland chief's pay jumps to €843,000 despite losses of €2bn
Published 20/03/2013 | 05:00
BANK of Ireland chief executive Richie Boucher's pay package has risen to just over €840,000 – despite losses of more than €2bn at the lender.
The €12,000 increase is the first time the value of his pay and pension package has increased since he was appointed in 2009 – and now makes him Ireland's best-paid banker.
It came as former minister Joe Walsh – one of two directors of BoI appointed to keep an eye on the lender on behalf of taxpayers – also enjoyed a significant pay hike.
The veteran Fianna Fail politician had his director's fees increased by 14pc to €90,000 last year for attending 18 board meetings and eight meetings of board sub-committees, including chairing the group that monitors pay. That is on top of his state pension of €119,000.
The bank's British chairman Archie Kane gets €37,000 a year to cover accommodation, utilities and the cost of running a car, on top of his €394,000 annual salary, the annual report states. He is also paid consultancy fees of €59,000 by the bank.
Mr Boucher was paid €843,000 last year – up from €831,000 in 2011 – including salary, benefits and pension contributions, according to the bank's annual report.
The veteran banker took a 20pc pay cut when he was promoted to run the bank in 2009, but under that deal he was not bound by the supposed €500,000 a year cap on pay at bailed-out lenders.
His predecessor at BoI, Brian Goggin, was paid €2.9m in the year before the bailout.
Last year's pay rise was thanks to an increase in the contribution made by the bank towards Mr Boucher's pension.
That will anger some at the bank, which is in talks with unions to cut contributions to staff retirement benefits as part of an effort to plug a €1.2bn pension hole.
In all, 14 directors shared €2.5m in pay and fees from loss-making Bank of Ireland last year.
The heads of all the state-backed banks were told to cut pay but given no orders to slash their own wages.
Among them are Walsh and retired civil servant Tom Considine.
They are the so-called "public interest directors", appointed to represent taxpayers on the bank's board after its €7bn rescue.
The state-appointed directors at all the banks were accused of "going native" at the Dail Finance Committee last year.
At BoI they have overseen hikes in the interest rates customers are charged for mortgages and credit cards.
Former Department of Finance official Mr Considine's director fees increased from €90,000 to €98,000.
The news that pay is rising at the top of the loss-making bank will spark anger after the heads of all the state-backed banks were told to cut pay by 6pc to 10pc by Minister for Finance Michael Noonan, but given no orders to slash their own wages.
But that call was based on a report from consultants Mercer that said Mr Boucher and other bank chiefs are underpaid compared to top executives elsewhere.
The Mercer report calculated the BoI chief's pay package at €776,400 last year.
That's because Mercer came up with a figure of €119,000 for the bank's contribution to Mr Boucher's pension, based on the average contribution it makes to employees' pensions.
The true figure is €186,000, and was worked out by actuaries Towers Watson, according to BoI.
The annual report also shows that Mr Boucher's total borrowing from the bank reduced to €758,000 last year from €838,000 at the end of 2011. It includes a €145,000 mortgage.
The board member with the biggest borrowings from the bank is Patrick Kennedy, better known as the chief executive of Paddy Power. He has a mortgage of €4.761m with the bank.
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