Monday 14 October 2019

AIB finance head quits amid pay-cap warning

Veteran Stanley to join Ulster Bank – which has no salary limit

Paul Stanley
Paul Stanley
Donal O'Donovan

Donal O'Donovan

AIB has lost its most senior financial officer just weeks after a warning that the bank cannot hold on to key staff because of the government-imposed pay cap.

AIB veteran Paul Stanley, who has been the acting chief financial officer at the mostly state-owned lender since 2011, has told the bank he is leaving to pursue other opportunities.

It is understood Mr Stanley is leaving to join Ulster Bank, which is not subject to any pay cap.

He would replace Charles McManus, who left the bank last year.

The move will reignite debate over the contentious issue of senior bankers' pay.

Earlier this month, AIB's deputy chairman Michael Somers said staff who were "systemically important" to AIB were being lost because of the €500,000-a-year limit or "cap" on bankers' pay.

He said AIB had not had a chief financial officer for some time because of a pay issue.

However, the Government has insisted that pay at state- backed banks will be capped as long as the banks are loss-making.

Yesterday, a spokesman for the Department of Finance said the Government has no plan to lift the salary cap.

Both AIB and Ulster Bank declined to comment.

It is not known how much Mr Stanley will be paid if he does take up a new role at Ulster Bank, or if pay is the main reason for his departure.

Mr Somers is one of two 'public interest' directors on the AIB board, alongside former Tanaiste Dick Spring.

They were appointed to look out for the wider interests of taxpayers and the bank as a condition of the bank's €20.7bn taxpayer-funded bailout.

Before he retired from his job as head of the NTMA, Mr Somers was the country's highest paid public servant.

In Dublin last week, Stephen Hester, the chief executive officer at RBS, which owns Ulster Bank, told the Irish Independent that he was against pay caps.

"Society has a mostly settled view that market-based economies work best. As long as that is the case it involves some significant income differentials," he said.

Progressive tax rates rather than "managed pay" especially for one sector but not others, is the best way to regulate income, he said.

However, he said people who shared his view had to ensure that when the markets get pay wrong, as they had with bankers' salaries in the past, it gets fixed.


Most staff at bailed-out banks are now paid below the theoretical maximum. The most notable exception is Bank of Ireland chief executive Richie Boucher, whose total pay package last year was €843,000. However, he was appointed before the current limit was imposed.

Finance Minister Michael Noonan is currently considering wage-bill reduction plans submitted by the heads of the three state-owned, or partly stated- owned banks, AIB, Bank of Ireland and Permanent TSB.

The banks submitted the plans after being told to cut their pay bills by between 6pc and 10pc.

It is understood the plans submitted all focus on reducing the cost of pension schemes but none of the proposals includes cuts to take-home pay.

Irish Independent

Also in Business