AIB lands new chief executive David Duffy without breaking salary cap
AIB has managed to secure its next chief executive without breaching the Government's €500,000 pay cap or throwing in any sweeteners like share options, bonuses or golf club membership.
But former ING executive David Duffy will be given a relocation allowance to cover his move from Singapore, as well as three months' free accommodation.
The appointment ends a year-long process to find a leader for AIB who was willing to accept the pay cap and the challenges of reshaping the almost-nationalised bank.
An experienced banker, with stints at Goldman Sachs, ING and Standard Bank, 50-year-old Duffy has been working as a banking consultant out of Singapore for several years.
His Twitter account reveals that he "visits home in Ireland on a regular basis", but also noted that on a recent trip he had "yet to find anyone who seems happy and says anything positive".
On his return to Asia in July, he said it was "such a nice change" to see "everyone positive about life and business".
The ex-pat's initial contract with the bank is for three years, with an option to extend for "up to a further three years by mutual agreement".
This marks the first time an AIB chief executive has had a prescribed end date in his contract; a spokesman for the bank said the clause was "not unusual" in companies generally.
In a statement, the Government said it had "no objection" to Mr Duffy's appointment.
It is understood that the bank's new boss has already met Finance Minister Michael Noonan, but that the decision on the appointment was taken by AIB's own board.
The Government's statement also set out the full terms of Mr Duffy's package, stressing that there would be "no medical, club membership, car allowances" etc beyond the €500,000 cap.
Expenses for relocation will have to be "vouched" and "reasonable" and the free accommodation for Mr Duffy will be "subject to board review".
AIB's outgoing executive chairman, David Hodgkinson, had publicly said there could be arguments for over-shooting the pay cap to attract a candidate of sufficient calibre. He yesterday said Mr Duffy "brings with him a wealth of international experience and a sound knowledge of the local market".
"He is ideally suited to the task of leading AIB's extensive restructuring and delivering the business performance that will best serve its customers and return the bank to sustainable viability," Mr Hodgkinson added.
Mr Duffy got the job after beating off competition from Brendan McDonagh, former head of HSBC's North American business, who is believed to have wanted to commute to AIB from the US.
Mr Duffy is taking over the bank at a time of enormous challenge, as AIB contemplates 2,000 redundancies and a major restructuring programme.
His background includes a stint as global head of HR at ING Group, giving him experience that may prove useful in AIB's stalled negotiations with trade unions.
Mr Noonan last night said that Mr Duffy would have to be given time to "get his feet under the desk" before making decisions on the lay-offs.
After ING, Mr Duffy headed up the London office of Standard Bank, where he had responsibility for Standard Bank's operations across Asia, Central and Eastern Europe and America.
His experience there may be called upon as AIB looks to re-enter international funding markets and eventually attract investment from international institutions.