European chief backs block on big bonuses for bankers
The head of banking supervision at the European Central Bank has waded into the debate about bonuses for Irish bankers, insisting now is not the time to restore boom-time pay conditions.
The comments from Daniele Nouy spell out the opposition of Brussels to higher executive remuneration as well as shareholder dividends at lenders still saddled by comparatively high volumes of non-performing loans.
"Is this the moment right now to think about bonuses when you still have work to do on your balance sheet, to clean the balance sheet before the next crisis?" Ms Nouy said in an interview with RTÉ News. "Definitely not in my view."
Ms Nouy's intervention came as the Government quashed AIB's proposal for a deferred bonus scheme at the bank's AGM in Dublin yesterday.
The defeat had been well-flagged after Finance Minister Paschal Donohoe pledged to vote against the measure last week. But he conceded the wage policy in the sector needed to be reviewed amid intensifying competition from firms relocating to Ireland on the back of Brexit.
A review of bankers' pay will be submitted to the Department of Finance at the end of the year, possibly in the wake of a general election that could further dent the chances of speedy restoration of performance-related pay.
As expected, the Government's opposition to AIB's proposal was matched by equally emphatic support for the measure from public market investors, who tipped €3.4bn into the bank at its initial public offering last year.
The Government, which retains a 71pc stake in the lender, represented 76pc of all votes cast.
Speaking to the media after the AGM, AIB's chief executive Bernard Byrne said the bank has experienced "very high turnover rates for senior positions and that's been true for the last number of years". He insisted the proposed bonus scheme, which would have offered up to 100 senior executives deferred shares in the bank each year up to the equivalent of 100pc of their salary, was about "establishing a level playing field".
Ulster Bank and KBC are not subject to the pay restrictions, while Bank of Ireland's CEO has never been bound by the €500,000 salary cap.