Colin Hunt announced as AIB's next chief executive
State controlled AIB has named Dr Colin Hunt - a one time economic advisor to Brian Cowen - as its next chief executive.
The proposed appointment is subject to consultation with the Minister for Finance Paschal Donohoe and approval by the Central Bank, but each is expected to be a formality.
Dr Hunt is a well known economist - he had a high media profile in the early to mid 2000s when he was chief economist at Goodbody Stockbrokers. He was later a special advisor to Brian Cowen until mid 2007, when the former Taoiseach was Minister for Finance, and before that he’d been a special advisor to former Transport Minister Martin Cullen from 2004.
Dr Hunt is an experienced banker, he has been managing director of wholesale and institutional banking and a member of the senior executive team at AIB since May 2016, after joining from Australian finance house Macquarie’s Irish operations.
At AIB, Colin Hunt emerged from four internal candidates following October’s announcement by outgoing CEO Bernard Byrne of his plan to leave the bank.
Given he already hold such as senior role his appointment is not expected to require the lengthy regulatory approvals involved in the appointments of external candidates as CEOs at Bank of Ireland and Ulster Bank.
With the bulk of AIB still in State hands, the appointment of Dr Hunt as CEO and as a director of the bank, must be also get the go ahead from the Finance Minister Paschal Donohoe.
Ironically, back in 2007 the minister was a Fine Gael Senator and he raised the issue of whether Dr Hunt was facing a potential conflict of interest by leaving his role as advisor to Brian Cowen to join Australian bank Macquarie. Paschal Donohoe said Mr Hunt’s knowledge of government strategy might give his new employer an advantage.
However, the appointment had been cleared by the Outside Appointments Board (OAB), which vets people moving to the private sector and had found no issue.
AIB used executive search agency Korn Ferry to help with its succession process following the surprise announcement in November that Bernard Byrne would leave the bank to take up a job with Davy Stockbrokers.
The AIB job is subject to the cap on bankers’ pay brought in after the crash - the bank can pay a maximum of €500,000 a year.
Korn Ferry is separately helping to prepare a report for Finance Minister Paschal Donohoe on the pay cap that is due in the new year, and a report by Bloomberg suggests it will advocate a looser regime.
AIB’s own chairman Richard Pym has been a vocal advocate of loosening the pay cap - blaming it for the loss of senior executives to rivals.
At AIB the four internal candidates are understood to be chief operating officer Tomás O’Midheach; Robert Mulhall, head of retail and commercial banking; and Jim O’Keefe, head of AIB’s financial solutions group, as well as Mr Hunt.
AIB kicked off the search for a new CEO after Bernard Byrne’s surprise announcement last month that he’s leaving the bank for stockbrokers Davy.
With the pay cap review not expected until the New Year, and little political pressure on the Minister to change to a more liberal regime - it’s unlikely the pay deal will change before Colin Hunt takes up his new job.
However, the Bloomberg news agency yesterday reported that Korn Ferry will recommend easing constraints on Irish bankers’ compensation which mostly apply at bailed-out banks.
That might involve cutting the tax on bank bonuses. Since the crash an 89pc tax has been levied on any bonus of €20,000 or more.
The report is still being drafted and will be reviewed by officials before being submitted to the finance minister, the Department of Finance said.
There are exceptions to the pay cap including Bank of Ireland’s CEO Francesca McDonagh, who earns a basic salary of about €950,000.