Don't bank on benchmarking keeping cap on pay
FEW topics generate as much anger as bankers' pay. There has been predictable anger after the Irish Independent broke a story earlier this week about the appointment of Mercer to examine the €500,000 cap on bankers' annual pay.
Mercer's appointment is the latest step in a carefully co-ordinated plan to end the pay cap imposed in the wake of the financial crash.
The Canadian benchmarking will look at pay scales at all levels in the "covered banks" that benefit from explicit state support, including AIB, Bank of Ireland and the former Anglo Irish Bank.
The bankers obviously hope that Mercer will conclude that the salaries are too low and act as a barrier to hiring top talent.
The debate about salary caps is a little academic at times. As our graphic shows, only one chief executive among the big three banks earns anything close to the cap; the other two earn much more.
While chief executives and other board members must reveal their salaries to shareholders, other executives can hide behind the bank. This makes the information that is regularly gleaned in Dail questions by Fianna Fail spokesman Michael McGrath very interesting.
Deputy McGrath regularly asks Mr Noonan for a breakdown of salaries in the so-called covered banks and then distributes them to the media.
Yesterday, he revealed that more than 1,700 employees across four banks receiving assistance from the State earn a basic salary of more than €100,000.
That's an increase of 1,000 people since June when Mr McGrath last carried out the exercise. Despite the recession and massive job losses at the lower end of the sector, it appears that salaries are rising quickly in the banking sector. This is strange because the banking sector itself is shrinking.
The figures show that at least 44 people working for our bombed-out banks earn more than €300,000, although this is a minimum figure because Bank of Ireland insists on presenting salaries in dollars and pounds as well as euro which makes accurate figures difficult to compile.
A further 174 people earn between €200,000 and €300,000.
Each bank has different characteristics when it comes to pay.
The former Anglo Irish has the highest average salaries. That's because the bank does not employ low-paid tellers and other counter staff.
The relatively small Anglo has 119 people earning more than €100,000 a year and eight people taking home more than €300,000 before they start counting their bonus and all the other benefits that are traditional in the financial services sector.
Bank of Ireland has the most earners in the €300,000-plus range -- half the people in this salary range across the covered banks work for this bank.
Allied Irish has the most people earning more than €100,000 -- more than rival Bank of Ireland, although the latter has more people above the €200,000 mark.
Permanent TSB is modest in comparison; it pays just 61 people more than €100,000 while only two executives are paid more than €300,000.
What Mercer makes of these salaries remains to be seen.