Central Bank to give its views to Donohoe on bankers’ pay report this week

Central Bank to give its views to Donohoe on bankers’ pay report this week

The Central Bank will give its views on a report into bankers’ pay to Finance Minister Paschal Donohoe this week, Department of Finance officials have said.

The report Mr Donohoe commissioned from consultants Korn Ferry last year has already been delivered to the department.

It reports on whether the Government should lift the €500,000 cap imposed on top pay at most of the banks that received substantial bailouts from taxpayers to keep them afloat during the crash.

It was commissioned after Mr Donohoe vetoed a shares incentive plan by AIB last year and to give him time to decide on the appropriate levels of pay and share-based incentives the banks may be allowed to offer staff.

Bank chiefs subsequently have said that without incentives they are struggling to hold onto skilled staff as they compete with new lenders that have set up a base in Ireland ahead of Brexit.

Pressed at the Public Accounts Committee on the department’s views on bankers’ pay, officials said they understood the reason for pay caps but also cited the loss of staff from Irish banks to large financial firms.

Separately, the officials said the value of the State’s holdings in the banks was about €8.6bn.

The Government owns 75% of Permanent TSB, has a stake of 70% in AIB, and owns over 14% of Bank of Ireland.

Officials also told the PAC the cost of Ireland appealing the decision of the European Commission in the Apple tax case has risen to over €7m.

Almost half of the amount was accounted for by setting up an escrow account to hold the €13bn the commission ruled the Government must claw back from Apple in unpaid taxes.

Officials said the appeal could run for many years.

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