Central Bank backs new AIB chief executive who may earn up to €1m
The Central Bank has approved the appointment of David Duffy as AIB's next chief executive.
Mr Duffy, who lives in Singapore and has worked with Dutch bank ING, must now wait for the Government to rubber stamp his appointment to the bank's top post. This could happen within weeks.
The Central Bank gave its approval after AIB recommended him for the job last month. This brings the long-running search for someone to run the state-owned bank closer to a conclusion.
It will be up to the Government, and specifically Finance Minister Michael Noonan, to sign off on his pay deal.
The bank withdrew a request to be allowed to offer Mr Duffy a salary of more than the Government-imposed cap of €500,000 a year -- but he still could be offered a lucrative pay deal, possibly worth as much as €1m.
The bank is likely to be allowed offer Mr Duffy extras, such as relocation expenses and pension contributions that could bump up his pay deal substantially.
Anglo Irish Bank chief executive Mike Aynsley is already earning a pay package of close to €1m. Last year, he was paid a €500,000 salary, €133,000 worth of pension contributions and relocation expenses totalling €324,000, bringing his total pay to €957,000.
The new AIB boss is also expected to be offered share options that, if the bank is restored to a healthier state in the future, could be worth many multiples of his salary.
AIB shares are today worth just 8c each. If they rise significantly during what is expected to be a four-to-five-year contract, Mr Duffy could walk away with a handsome reward for his efforts.
He is also expected to be offered a long-term bonus that would trigger a pay-off if he meets his targets.
The bank has plans to cut 2,000 jobs -- but this is unlikely to happen until after Mr Duffy is installed.
It will be hoping the job cuts will be voluntary with most of them expected to be made at the bank's headquarters.