Bank bosses 'to reveal pay cuts'
Published 24/04/2013 | 08:36
Bank bosses are expected to reveal substantial pay cuts within the coming weeks, Taoiseach Enda Kenny has declared.
Under fire in the Dail over Bank of Ireland chief executive Richie Boucher's 840,000 euro pay package, Mr Kenny said the Government has ordered bankers to cut their costs by between six and 10%.
"My understanding is that it will include a substantial contribution from the leadership of the banks in respect of pay and pensions," he said.
Mr Kenny said an announcement is expected within the next two weeks about the cutbacks, suggested by an independent report on banker salaries carried out by Mercer consultants for the Government.
Mr Boucher was paid more than 840,000 euro last year in salary, benefits and pension contributions - despite the bank suffering losses of more than two billion euro.
The Fine Gael/Labour coalition brought in a 500,000 euro pay cap on bankers' pay, but claims this only applies to lenders over which it has control. Bank of Ireland - which is 15% state-owned - was one of those rescued by the taxpayer-backed bailout.
Mr Kenny said it was important to "squeeze" the banks. "These banks are only in existence because of the taxpayer, and it is right and proper that Government would force and require banks to reduce their cost base in order that they become solvent again and play a part in the development of our economy for the times ahead."
But Sinn Fein deputy leader Mary Lou McDonald accused the Taoiseach of being aggressive with frontline public worker pay while taking a gentle approach with Mr Boucher. The bank boss was taking home in a fortnight what an average nurse earns in an entire year, she told the Dail.
At the Bank of Ireland annual general meeting, the lender said it is making steady progress in restructuring mortgage repayments for struggling homeowners. Finance minister Michael Noonan has already said he will abstain from voting, on behalf of the State as shareholder, on director pay until the demanded 6% to 10% savings are delivered.
Independent TD Shane Ross said ministers' decision not to vote on pay and to endorse the reappointment of the bank's board was "quite staggering". But Labour minister Pat Rabbitte defended Mr Noonan's decision not to intervene.