Business Irish

Sunday 18 March 2018

Taoiseach won't rule out lifting €500,000 AIB salary cap

Siobhan Creaton

TAOISEACH Enda Kenny has said the Government would need to see "an exceptionally compelling case" before it would agree to pay a new AIB boss more than €500,000.

He said the Government had not received any "formal" application, although the bank has raised with the Department of Finance the issue of lifting the €500,000 salary cap.

"I would need to see an exceptionally compelling case from any bank to break this ceiling," said Mr Kenny in the Dail.

The Taoiseach said he had "no doubt" that there would be people willing to serve as the chief executive within the €500,000 salary cap.

AIB's executive chairman, David Hodgkinson, said this week that the bank would need to offer a "market-based" compensation package to a new external chief executive and that it was in talks with the Department of Finance about this.

The bank has previously raised the €500,000 cap as posing a difficulty in attracting suitably experienced candidates to AIB's top job.

Labour TD Derek Nolan TD described the AIB request as "appalling", adding that it came at a time when thousands of hard-pressed taxpayers were struggling to make ends meet.

"A salary of €500,000 is more than adequate to recruit a quality candidate to this position. To exceed this amount and breach the Government's pay cap would, to my mind, be wrong and extremely insensitive, given the current financial difficulties facing this State," he said.

Such a pay cheque is already two and-a-half-times the salary of Enda Kenny, he said.

Mr Nolan added: "When the Government took office, it slashed pay for the Taoiseach, Tanaiste and ministers.

"Instead of asking for more money, AIB should be following suit and reducing the salary for a new chief executive.

"People will be outraged if this move goes ahead as billions have already been poured into the banks to ensure we have a strong fiscal base."

AIB's call for a more lucrative pay package for a new chief executive angered bank officials who are currently in negotiations with it about up to 2,000 redundancies.

The general secretary of the Irish Bank Officials Association, Larry Broderick, said the request for more money for a new AIB chief executive "beggars belief".

"I just genuinely feel that the focus is all wrong," he said.

"Who is this person that we need to lead the bank into a restructuring?" asked Mr Broderick.

"Mr Hodgkinson, who's doing a capable job engaging with us, has appointed a new management team to restructure the bank. Why can't the people that are charged with that responsibility do that or somebody else?"

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