Bank executives should consider deferring bonus payments until a time when lenders are better positioned to disburse them, the general secretary of the Irish Bank Officials Association has said.
Larry Broderick said bonuses generate a bad culture in banking and that they should not be part and parcel of future remuneration structures in the sector.
"The reality is that the bonus culture not only in Irish banking, but right across the world, is one of the reasons we are in the financial and economic mess we are in," he told RTÉ's Morning Ireland.
Mr Broderick said that if the economy was to be sorted out people needed to look at the broader picture and not think selfishly about bonus payments.
Minister for Finance Brian Lenihan last night announced that 90 per cent of bonuses paid to senior Irish bankers will be recouped by the exchequer in tax after it was reported that AIB staff would share €40 million in deferred bonuses.
In the Dáil this morning, Mr Lenihan stressed that bonuses to be paid to AIB bank executives would be subject to the "highest rates of income tax" and would be fully taxed. Mr Lenihan pointed out that no bank bonuses were paid in 2009.
The bank's executive chairman David Hodgkinson said yesterday the bonuses reflected its past and was "not the way we intend to conduct ourselves in future".
"The issues we are facing mean that the bank currently relies on Government and taxpayer support and I am working to ensure that, in future, our pay and benefits policy is more reflective of our organisation's responsibilities, performance and of the economic climate," Mr Hodgkinson said.
Mr Broderick said the vast majority of AIB staff did not receive bonuses and that frontline workers were wrongly falling victim to "abuse, ridicule and anger" from the public.
"I can understand that anger but it should not be vented at people who are in the coalface working with customers everyday," he said.
He said that rather than bonus payments the most pressing issue for union members in AIB was to clarify the future role of the bank within a restructured Irish financial sector.
Mr Broderick said he was flabbergasted that the Government only decided to move yesterday to tax bank bonus payments heavily.
"What have they been doing for the last two years in the context of this industry?" he asked. "This is not a new issue. This has been going on for the last two years."
