Minister says laws preventing state-supported banks from getting bonuses 'will not be changed'

Minister says laws preventing state-supported banks from getting bonuses 'will not be changed'

The laws preventing bankers in state-supported banks from getting bonuses will not be changed, according to the Finance Minister.

Paschal Donohoe says he will vote against proposals at the AIB AGM to offer a share scheme.

The Minister also plans to carry out a review of the remuneration policy for bankers.

But Mr Donohoe says for now there will be no bonuses for bankers.

He said: "Very extensive restrictions are in place which in summary limit the compensation and remuneration for staff in AIB, Bank of Ireland and Permanent TSB to €500,000.

"Policy also dictates that bonuses and many other benefits cannot be paid to staff."

Commenting on his intention to vote against the AIB resolution next week and to carry out a review of banking remuneration policy, he said: "I recognise the Chairman and Board’s right to put this resolution to all the shareholders of AIB, given their concerns about management retention and incentivisation in what is an increasingly competitive employment market.

"However I cannot vote in favour of the resolution being put forward next week."

A summary of banking remuneration restrictions:

  • A total remuneration cap of €500,000, excluding a standard pension allowance
  • No bonuses
  • No new fringe benefits
  • No cash allowances or pension top ups
  • No new commission or incentive schemes
  • No contractual arrangements with executives or directors on termination that provide compensation
  • Restrictions around contractual payments to employees on termination that provide compensation
  • Restrictions on fees payable to non-executive directors

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