Pay cap and bonus ban may be axed to lure Brexit banks

The long-standing pay cap and bonus ban for top bankers could be scrapped in a bid to entice financial firms fleeing Brexit-hit London to Ireland.

Finance Minister Paschal Donohoe said the existing pay cap policy is being monitored as part of attempts to make Ireland a more attraction destination for firms.

At the depth of the economic crash, the Government imposed a €500,000 cap on bankers’ salaries and banned bonuses due to the damage the sector had caused the country.

While the move was criticised by banking experts over concerns it would limit the quality of bankers Ireland could attract, it was widely welcomed by a public outraged at multi-million euro salaries given to senior executives.

Responding to a Bloomberg report claiming the Government is considering scrapping the pay cap and bonus ban — with a tiered bonus system among the moves potentially on offer — Mr Donohoe admitted the policy could change.

“In relation to the future of policy on bankers’ bonuses, I have made no decision in relation to that matter but it is a policy we are going to monitor in light of our efforts to strengthen our offering in financial services in light of Brexit,” he said.

Larry Broderick, general secretary of the Financial Services Union — which represents lower-paid bankers — last night urged Mr Donohoe not to scrap the pay cap, saying to do so would be “completely out of touch with reality” and “delusional”.

Mr Donohoe was speaking after holding Brexit-related talks with British chancellor of the exchequer Philip Hammond and also warned the fluctuating value of the euro against sterling risks impacting on next month’s budget.