Business Irish

Friday 22 September 2017

IBRC refuses Noonan's request to reduce pay of staff on €200,000-plus

Gordon Deegan

THE former Anglo Irish Bank snubbed a request from Finance Minister Michael Noonan to hit its top earners with pay cuts, it emerged yesterday.

Irish Bank Resolution Corporation (IBRC), which has been given more than €29bn by taxpayers, told Mr Noonan that high earners at the broken lender should not take a pay-cut.

IBRC "has considered reductions in pay levels for individual staff in IBRC but has, however, recommended to me its view that pay cuts should not be implemented at this time", Mr Noonan said yesterday.

Earlier this week, Mr Noonan revealed that eight staff at the state-owned IBRC are earning €300,000 or more per annum with a further 16 earning between €200,000-€299,000 per annum.

Earlier this year, the IBRC confirmed the total remuneration package for its chief executive Mike Aynsley came to €866,000 last year

The former Anglo Irish Bank's refusal to cut salaries contrasts with the National Treasury Management Agency (NTMA), where 15 staff members earning over €200,000 took a 15pc pay cut in response to a request from Mr Noonan.

IBRC has received €29.3bn in state funding.

In a written Dail response to Deputy Eoghan Murphy (FG), Mr Noonan explained: "The decision not to pursue pay cuts is on the basis that staff retention is a critical issue for IBRC.

"There has been considerable reduction in staff numbers and current staff are being regularly headhunted by banks and other organisations."

"It is the board's view that further pay cuts would create a risk for the bank as to the retention of staff and would impact negatively on the bank's ability to deliver its mandate.

Adjusted

"The board has indicated its view that the skills of staff within IBRC are integral to the successful delivery of the bank's asset recovery programme on behalf of the State and, by extension, the taxpayer.

"In this context, IBRC has also pointed out to me that a 20pc reduction was applied to the salaries of senior management in the former Anglo Irish Bank immediately post nationalisation. These adjusted lower salaries have remained in place for subsequent replacements to those roles.

"IBRC does not operate a performance-based incentive plan. The bank had further indicated that total remuneration paid to the top 50 individuals in the organisation in 2009 has reduced by 15pc as at March 2012.

"In addition, total staff costs have reduced by 48pc from end- 2008 to end-2011 and this includes six months of additional cost resulting from the merger with INBS in 2011.

"Since nationalisation there has been a 60pc reduction in total headcount in the combined Anglo and INBS organisations from close to 2,250 in January 2009 to 919 today."

Irish Independent

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