ALLIED IRISH Banks (AIB) undertook a “comprehensive search” across the world for a suitable candidate before proposing its own executive Colm Doherty for the role of managing director, the chairman of the bank’s remuneration committee Seán O’Driscoll said yesterday.
While the Minister for Finance had indicated the Government’s strong preference for an outside candidate, Mr O’Driscoll said the bank’s requirement in filling the post was to find the best candidate for the institution.
“As a board and as individuals, we had no preconceived ideas as to whether or not this would be an internal or external appointment. Our singular duty was to find the best candidate,” he told RTÉ Radio’s News At One programme.
Mr O’Driscoll who, as AIB’s senior independent director, played a central role in the appointment, said Mr Doherty was chosen from a shortlist of names by the bank’s nominations committee. Along with Mr O’Driscoll this included bank chairman Dan O’Connor, outgoing deputy chairman David Pritchard and Government-appointed director Dick Spring.
Asked if the €500,000 salary cap on executive pay had hampered the recruitment process, Mr O’Driscoll said the restriction had been a “significant issue”.
But he said other hindrances proved equally problematic, including “the constant media attention and scrutiny” which the appointee was likely to attract.
Pressed as to why AIB had originally put forward proposals for Mr Doherty to retain a salary of €633,000 when there was a clear guideline that it should be no higher than €500,000, Mr O’Driscoll said he was not going to add to the “rampant speculation” surrounding the appointment.
“The fact is that Mr Doherty has agreed to take up the role at a salary of €500,000 which is considerably lower than what he earned previously as chief executive of the bank’s capital markets division, and significantly lower that the previous salary for the role of chief executive of the bank.”
When asked if it was his understanding that Mr Lenihan would support the bank’s initial proposals, Mr O’Driscoll declined to reveal details of discussions with the Minister or Government officials prior to the bank’s first proposal not to cap Mr Doherty’s salary. “We have set out what Mr Doherty’s salary package will be and it is in compliance with the Government’s policy in regard to remuneration.
“The directors of AIB are not in the business of eyeballing a Government or, as somebody said, giving one finger to the taxpayer and one finger to the Government,” he said.
Asked if the €500,000 ceiling on pay applied just to the salary or whether there were other means through bonuses or fringe benefits to augment executive remuneration, Mr O’Driscoll said: “There is an absolute undertaking by the institution that there will be no bonuses for a number of years and thereafter with the prior approval of Government.”
