Government orders banks to cut pay bills by up to 10pc
THE government has told the heads AIB, Bank of Ireland and Permanent TSB to cut their pay bills by 6pc to 10pc after a review found average pay has increased since the bailout.
It means cuts at the bailed out banks in line with saving the government is targeting for the public sector under the Croke Park 2 pay deal.
The saving are to be achieved through reductions in payroll and pension benefits, new working arrangements and greater efficiency, according to the Department of Finance.
Management at each of the banks will be free to come up with their own schemes to achieve the savings being targeted, according to finance minister Michael Noonan.
The minister is not looking for blanket pay cuts, and there is even a chance some bank staff with sought after skills will end up with better pay as a result of the process, which is expected to take more than a year.
And the Irish Independent understands that the very highest paid managers at the banks could escape pay cuts themselves after a review by consultants Mercer found that chief executives who currently earn between the €400,000 at Permanent TSB and €623,000 at Bank of Ireland are paid less than their European peers.
In contrast lower paid staff are paid better than average, making them vulnerable to salary reductions.