Saturday 17 August 2019

D'Arcy says bankers pay cap should remain – report

Michael D’Arcy. Photo: INM
Michael D’Arcy. Photo: INM
Ellie Donnelly

Ellie Donnelly

Minister of State for Finance Michael D'Arcy has said the banking pay cap should remain in place, despite increasing pressure from lenders who want the policy ditched after blaming it for the loss of senior executives.

Finance Minister Paschal Donohoe is currently considering whether the €500,000 a year pay cap at bailed out banks should be lifted and whether bonuses should be allowed again.

Minister Donohoe has a report by headhunters Korn Ferry on the issue but has not yet made a decision on whether to lift the caps.

“The senior executives are on very large salaries and as long as the state owns [their banks], I’m satisfied the pay caps are appropriate,” Michael D’Arcy told the Financial Times in an interview in New York, describing bankers’ pay as “the very very top percentile of salaries in Ireland”.

“We have come through a pretty difficult decade — banking bonuses, as you know prior to the previous collapse, they were not a helpful factor,” he added.

In the interview Mr D’Arcy also ruled out any further sale of the government’s stakes in AIB and Bank of Ireland before the UK leaves the European Union on October 31.

The Government currently owns 76pc of AIB and 14pc of Bank of Ireland.

A push to end bankers pay restrictions here has been led by AIB, which has complained it is losing talent to financial institutions and tech firms not bound by pay caps.

AIB had proposed rewarding top executives with deferred shares that were in part conditional on the state getting the remaining €21bn of the cost of its bailout back via share sales.

Online Editors

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