New AIB boss to earn €500,000 in deal reflecting extra responsibility
Published 30/10/2010 | 05:00
The new AIB executive chairman will be paid €500,000 a year and be provided with accommodation in Dublin as part of a package agreed with the bank.
Under government guidelines the chair of AIB is not meant to be paid more than €276,000 per annum, but David Hodgkinson has been awarded almost double this because he is an executive chairman, with additional responsibilities.
It is understood the pay package for Hodgkinson was agreed by a sub-committee of the AIB board, in liaision with the government and the NTMA. During earlier discussions higher figures than €500,000 were considered, but the committee was not prepared to agree to this. Last night the NTMA, the Department of Finance and AIB itself all declined to comment.
Hodgkinson will face his first public AIB meeting on Monday when he chairs an egm to approve of AIB's sale of its stake in US lender M&T. This meeting is likely to be stormy as shareholders are angry that their shares will be hugely diluted in value by an upcoming investment by the government. AIB has been told to raise €10.4bn in fresh cash so that it's insulated from future bad debts.
Hodgkinson succeeds Dan O'Connor who was paid €276,000 a year as a non-executive chairman.
Earlier this year he became executive chairman, but his pay for doing this job has not been released by the bank.
It will be published when the 2010 annual report comes out early next year.
O'Connor resigned a month ago when the government ordered the bank to raise the extra money. Chief executive Colm Doherty also announced his decision to step down and will depart at the end of November.
Hodgkinson is a former senior executive with British banking giant HSBC, having joined the group in 1969.