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We've forced bank bosses to take big pay cut, says Kenny

BANK bosses are expected to reveal substantial pay cuts within the coming weeks, says Taoiseach Enda Kenny.

Under fire in the Dail over Bank of Ireland chief executive Richie Boucher's €840,000 pay package, Mr Kenny said the Government has ordered bankers to cut their costs by between 6pc and 10pc.

"My understanding is that it will include a substantial contribution from the leadership of the banks in respect of pay and pensions," he said.

Mr Kenny said an announcement is expected within the next two weeks about the cutbacks.

Mr Boucher was paid more than €840,000 last year in salary, benefits and pension contributions – despite the bank suffering losses of over €2bn.

The Fine Gael/Labour Coalition brought in a €500,000 pay cap on bankers' pay, but claims this only applies to lenders over which it has control.

Aggressive

Bank of Ireland was rescued by the taxpayer-backed bailout.

But Sinn Fein deputy leader Mary Lou McDonald accused the Taoiseach of being aggressive with frontline public worker pay while taking a gentle approach with Mr Boucher.

The bank boss was taking home in a fortnight what an average nurse earns in an entire year, she told the Dail.

At the Bank of Ireland annual general meeting, the lender said it is making steady progress in restructuring mortgage repayments for struggling homeowners.

Finance Minister Michael Noonan has already said he will abstain from voting, on behalf of the State as shareholder, on director pay until the demanded 6pc to 10pc savings are delivered. Independent TD Shane Ross said the minister's decision not to vote on pay and to endorse the reappointment of the bank's board was "quite staggering".

"This was the Government's opportunity to cast 15pc against these outrageous amounts of money," he added.

But Labour Minister Pat Rabbitte defended Mr Noonan's decision not to intervene.

"The Government fixed a cap of €500,000 in respect of the banks over which the minister for finance had some control," he said on RTE. "In the case of the Bank of Ireland that's not the case, the minority stake of 15pc does not entitle the minister to intervene in that way.

"I can perfectly understand how people think that is an unconscionable remuneration package in any bank given the hardship that the banks of this country have inflicted on the people of this country."

hnews@herald.ie


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