MINISTER FOR Finance Michael Noonan has said he has seen nothing to suggest that the €500,000 Government pay cap for bankers should be removed for the new chief executive of AIB.
The bank has indicated to the Government that it hopes to be able to appoint a candidate within the pay cap. The role is expected to be filled in the coming weeks.
“It’s a matter for the Government in the first instance,” said Mr Noonan, speaking in Luxembourg last night at an EU meeting.
“AIB and everyone else is aware that the pay in the banks is capped at €500,000.
“The position is they have indicated already that they might have a difficulty in recruiting at that level of pay, and both the Taoiseach and I have said, if they are making a case for a higher salary, it would want to be a good case indeed.”
He added: “I do not see any reason from anything I have seen so far to move from the €500,000 cap.”
AIB executive chairman David Hodgkinson said last month that he hoped an appointment could be made within an earlier recommended pay level of €690,000.
The bank’s search for a new chief executive has reportedly narrowed to two candidates: David Duffy, a former senior executive at Dutch bank ING; and Brendan McDonagh, the former head of HSBC’s North American business.
AIB has yet to submit a detailed proposal to the Government on what it will pay the chief executive, including ancillary benefits and pension payments.
The bank may propose a long-term plan to pay the chief executive incentives based on a recovery of some of the €21 billion that the State has pumped into the bank and its new subsidiary, EBS, taking a 99.8 per cent stake.
Meanwhile, AIB has appointed its head of corporate and commercial banking, Ronan O’Neill, to manage its UK operations.
Mr O’Neill will replace long-serving AIB executive Nick Treble, who will become head of the bank’s non-core UK businesses, which will be sold off or run down.
An AIB employee since 1979, Mr O’Neill was head of corporate banking in the capital markets division before being promoted to the role of head of corporate and commercial banking earlier this year.
Gerry McGinn, who headed up Irish Nationwide after Michael Fingleton, will report to Mr O’Neill as head of AIB’s Northern Irish operation, First Trust.
AIB is going through the biggest restructuring in its 45-year history.
