Embattled bank's salary cap too low as it tries to lure a heavy hitter for top job
AIB's executive chairman David Hodgkinson has finally found a potential new chief executive for the beleaguered bank, but one who is unlikely to get out of bed for €500,000.
At least this is what he appears to be telling the Government as he tries to convince Finance Minister Michael Noonan to offer this top banker a more lucrative pay package.
The €500,000 cap on bank chief executives' pay was introduced by his predecessor, Brian Lenihan, in the midst of a bitter row between the Fianna Fail minister and AIB over the appointment of Colm Doherty to the top post in 2009.
Mr Lehihan wanted to put an outsider in charge of the bank that is now effectively in receivership.
But AIB successfully pushed for Mr Doherty, who had been a senior executive at the bank since the 1980s, to get the job, insisting he was the best candidate.
All Mr Lenihan could do, it seems, was to ensure Mr Doherty and other insiders who were being lined up at other banks being bailed out by the Government wouldn't be seen to be rewarded for their failures with a nice, juicy salary deal.
So he imposed a €500,000 salary cap -- and now Mr Noonan is being lobbied to lift it.
The request won't be well received, but a strong case will be made that if the Government, as the bank's main shareholder, wants to put someone in charge who knows what they are doing and can reverse its fortunes, it will have to pay the going rate for this type of job.
"If they want to get a heavy hitter into this role they will have to pony up" says Ronan Colleran, managing director of the Accreate international executive recruitment group.
"It is a difficult political decision, but if it wants the bank to be in safe hands, it needs a package to reflect that" he adds.
Of course, that hasn't really been our experience.
For decades Ireland's top bankers trousered millions of euro every year in generous salary, bonus and pension deals while collectively bankrupting the country.
The request to Mr Noonan also comes on the back of a lot of public anger about the €2.7m payment to AIB's former boss when he departed the bank.
This payoff included salary, pension and a €953,000 payment because of the early termination of his contract by the Government.
Given how well bankers have always rewarded themselves, a salary of €500,000 is considered very low.
It is also well below the pay of the chief executives of many of Ireland's public quoted companies, whose pay deals tend to amount to more than €1m.
Of course, these companies are not being propped up by the taxpayer.
It will all come down to the calibre and experience of the individual Mr Hodgkinson wants to hire.
If the minister believes he/she is the right person for the job he may find the ways and means to pay more, but it won't be a popular decision.