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Enda Kenny warns bank bosses to expect ‘substantial’ pay cuts

TAOISEACH Enda Kenny has warned bank chiefs to expect “substantial and significant” pay cuts in the coming weeks.

He told the Dail today that Finance Minister Noonan expects pay cuts from bank executives – including Bank of Ireland (BOI) chief Richie Boucher – in the coming weeks.

Mr Kenny said Mr Noonan, as a 15pc shareholder in Bank of Ireland, abstained from voting on Mr Boucher’s pay at the bank's annual general meeting today pending “substantial and significant” anticipated pay cuts from bank executives.

But, as anticipated, shareholders at the bank voted overwhelmingly in favour of the €843,000 a year pay deal for chief executive Richie Boucher as well as pay deals for other board members.

More than 99pc of shareholders who did cast their ballots endorsed pay packages even as Taoiseach Enda Kenny said he wants to see “substantial and significant” pay cuts from bank executives.

All of the motions put to Bank of Ireland shareholders, including backing directors in their board seats were carried by big margins.

At the meeting, Mr Boucher, who is sitting on a pay packet of over €840,000, was told “F you” by an angry shareholder.

The shareholder said the attitude among the public is: "F you Mr Boucher, F you Bank of Ireland and F you, the coalition government."

Mr Noonan said earlier he’ll be abstaining in the shareholder vote on Mr Boucher’s pay packet at the meeting, sparking condemnation from opposition politicians who claim he should be opposing it using the Government’s 15pc stake in the bank.

Mr Boucher was paid more than €840,000 last year in salary, benefits and pension contributions, despite the bank suffering losses of more than €2bn and well over the €500,000 pay cap on bankers' pay.

Last month Mr Noonan told the banks to cut pay by between 6pc and 10pc, following a report from consultants Mercer on their wage levels.

The Finance Minister expects a response from the banks in the next two weeks, and Mr Kenny expects action to be taken then.

“He expects that to be back to him in the next couple of weeks, and a substantial contribution from the leadership of banks,” Mr Kenny told the Dail this morning.

"Because of the fact that he has that process in train he expects to have that recommendation responded to in the next two weeks.

"The banks are only in existent because of the taxpayer," Mr Kenny, adding it was "right and proper" the Government asks for pay to be cut.

“It is right that it should be because these are extraordinary salaries.”

Earlier the bank said it had said it is making steady progress in restructuring mortgage repayments for struggling homeowners.

The bank said it has not experienced any adverse impacts on deposit volumes since the expiry of the Government Guarantee Scheme last month and that operating costs remain a key priority despite losing 1,200 staff last year.

The bank stated customer deposits have remained stable and that it has achieved its "steady state" loan volume target of €90bn.

"Our diverse loan portfolios, including those relating to our Irish Mortgage and SME customers, continue to perform in line with expectations and we are continuing to make steady progress in the provision of appropriate restructuring arrangements to co-operating customers who have difficulties meeting contracted loan repayments," it said.

"We continue to expect that impairment charges will reduce from the current elevated levels trending over time to a more normalised impairment charge as the Irish economy recovers."

Online Editors