Monday 19 February 2018

Central Bank plans to revamp staff bonus scheme

Warning: Financial Regulator Cyril Roux
Warning: Financial Regulator Cyril Roux
John Mulligan

John Mulligan

The Central Bank is planning to revamp the way it rewards its employees.

It follows controversy over claims about bonus payments at the bank, and pressure as staff transfer to Frankfurt for better paid roles

A tender document reveals it is going to hire an external consultant to help carry out a "detailed development and design of [the] future reward model for the Central Bank".

The expected appointment comes after it was claimed that secret bonuses were being paid to a select cadre of staff in an effort to prevent them leaving.

Trade union Unite has claimed the payments breach emergency laws introduced during the financial crisis.

The union is taking legal advice in relation to them.

The Central Bank - whose new governor, Philip Lane, started his job last week - said that it already uses external compensation and consultation services.

But it now wants an "in-house consultancy service" to support the "management of deliverables".

It has told prospective consultants that the reward model "needs to be aligned to agreed principles, incorporate pay progression design, cost assessment, modelling, governance and supporting processes".

It also wants them to develop a recognition strategy, and "manage a comprehensive review of feasibility of providing flexible benefits with the Central Bank, taking into account financial, design, technology and cost factors".

The Central Bank declined to elaborate on detailed expectations for the plans.

It said a review has been examining a range of areas, "including organisational structures, ways of working, career paths, reward and recognition, and internal processes".

It comes less than a week after deputy Central Bank governor Cyril Roux bemoaned public sector pay restrictions, which he said hampered the Central Bank's ability to keep its supervisory function beefed up.

Mr Roux, who is also the Financial Regulator, said that the Central Bank would lose more of its supervisory staff to the European Central Bank next year, putting more pressure on the strength of the banking supervision capacity in Ireland.

Staff who move to Frankfurt secure "much better" terms and conditions, according to Mr Roux.

"They have been attracted by the exciting challenge of working abroad, in helping establish the SSM (Single Supervisory Mechanism), and the much better financial terms and employment conditions offered to them," he told the Banking and Payments Federation Ireland Banking Union conference.

"A second wave of supervisors is expected to leave the Central Bank and other national competent authorities next year, as the ECB will be increasing its SSM headcount by 25pc.

It said this, combined with public sector pay restrictions, "will bring further stresses to the bench strength of banking supervision in the Central Bank, and to the challenge of replenishing once more our ranks."

Staff moving from the Central Bank to assist with the SSM are effectively on secondment - and can return to the Central Bank.

Irish Independent

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