Inside the world of business
Salary cap rears its ugly head
Kudos to bank chief executive Mike Aynsley for his statute of limitation-beating move against Michael Fingleton and five other former Irish Nationwide directors.
Not only is it unambiguously the right thing to do, it comes as people are scrutinising the job being done by Aynsley (pay €866,000 including salary of €500,000) and his chairman Alan Dukes (pay €150,000) at Irish Bank Resolution Corporation (as Anglo Irish Bank is now known) and in particular their relish for banking former Anglo clients such as Paddy McKillen and Denis O'Brien.
Aynsley's salary is a lot of money by any standard and no doubt the source of some resentment over at Nama where Brendan McDonagh and John Corrigan are washing Anglo's dirty laundry on salaries of €365,500 and €416,500 (plus tasty State pensions) respectively. Given the relative size of the organisations – Nama manages loans of €30 billion relative to IBRC's €29 billion – the differential is hard to credit.
Not surprisingly the issue cropped up at AIB's results conference yesterday where new chief executive David Duffy manages loans of €99 billion and is subject to the Government-imposed pay cap of €500,000 (which must include benefit-in-kind extras) and contributions to his pension.
Asked would he have applied for the job at a smaller bank, IBRC, that paid more, he replied: "The money is not the primary motivation. This is a job that has a cap. My cap on the pay is what it is. There are no hidden elements, no other elements in the mix.
"It is a cap that I was happy to accept. I think that the challenge of bringing this bank back to being a strong and respected bank that people are proud to work for and in so doing delivering a result that allows us to support the economy and growth – that was the challenge. It was put to me in those terms as I took it and it was on those terms that I accepted it."
Good start for small firms seeking business
Earlier this week some 25 Irish companies gathered in Boston for the first Ireland: Gateway to Europe conference. The idea was an innovative one. A group of Irish companies got together, paid their own way and headed for the US to drum up business.
A central premise of the event – which was attended by representatives of around 200 US companies – was to target small and medium-sized US companies, a category that tends to fall under the radar of the IDA, which is inevitably more focused on attracting big name employers.
While smaller companies and commercial activities may not generate many direct jobs for Ireland, the event gave a window into the important spin-off activity that accompanies inward investment.
A decision by a company to locate its intellectual property operations in Ireland may not mean much in terms of direct jobs, but it has a significant impact on ancillary services such as the accountancy and legal profession.
Inward investment into Ireland also has knock-on effects on other industries, which may appear unrelated on first glance. One of Ireland's key advantages for US companies, for example, is its comparatively cheaper health insurance regime. In turn this can generate significant business for Irish insurance and pensions companies, which explains the presence of companies such as VHI and Irish pensions business IFG at the Boston event.
With the contraction in the domestic economy, it is unsurprising that Irish companies are looking outside Ireland to generate work at home. That this group of Irish businesses decided to take the plunge and fund an event of this kind should be commended.
Of course, its success will ultimately be measured by how much follow-up business is generated.
Most companies at the event – which was organised by MKO Partners, Sigmar Recruitment, Byrne Wallace, and FKM – reported securing a number of new business leads at the one-day event.
At a time when businesses across Ireland continue to find themselves under pressure, that's not a bad start.
Next week
The governing council of the ECB meets on Wednesday but is expected to leave interest rates unchanged at 1 per cent
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