By Eamon Quinn
AIB does not plan to alter its controversial proposal to restore an executive shares incentive for the first time since the banking collapse and bailouts, according to AIB chief executive Bernard Byrne.
Finance Minister Paschal Donohoe, who announced last week the Government would vote against the proposal, yesterday wielded its 71% voting block at the lender’s shareholders’ meeting to oppose the pay resolution until a consultant completes a review of pay caps at the bailed-out banks, which he indicated would be completed at the end of the year.
However, speaking to reporters at the bank’s AGM, Mr Byrne defended the re-introduction of the top executive shares incentives plan and, in welcoming the Department of Finance’s review, he echoed Mr Donohoe’s comments that the changing landscape caused by Brexit will lead to more banks relocating from Britain to Ireland, heightening competition for bankers.
Mr Byrne said AIB was seeking to compete on the same “level-playing field” to retain and recruit executives. He also queried whether the scheme could be characterised as a generous plan, as it was put together after consulting “all major” shareholders and after studying what the market was offering banking staff. He said it had no intention of doing anything different with the scheme.
“The minister has made the position clear. It is time to wait for the review,” which he again welcomed.
Under the scheme, AIB top executives, from 2019, could benefit from a performance assessment up to a maximum of 100% of their pay. In relation to the deferred annual share plan, it said “the achievement of challenging and appropriately stretching performance targets will result in an annual award of up to 100% of fixed pay”.
Performance measures would include meeting financial targets “with a particular focus on reducing non-performing loan exposures, increasing cost efficiencies, and maximising shareholder return”, according to the proposal.
The AGM also heard an apology read out by AIB chairman Richard Pym to Wexford farmer Paddy Kehoe, who had raised questions at a number of AGMs about his banking matters.
He was famously ejected by security in 2005 from an AIB AGM on the instructions of then chairman Dermot Gleeson when he tried to raise questions about his personal accounts.
“We have finally resolved these issues, and I would like to reiterate my apologies to Mr Kehoe and his family,” said Mr Pym, in reference to the bank’s “handling of his accounts”. The size of the settlement has been kept under wraps.