Bookmaker bets on insider for AIB job

THE arbitrary remuneration limit of €500,000 on the top job at AIB will make it very difficult for the group to attract somebody from outside the bank, according to Oliver Gilvarry, head of research at Dolmen Securities.

As the search for a replacement for Eugene Sheehy begins, bookmakers Paddy Power have named Colm Doherty, head of AIB capital markets, as the front runner for the job.

Doherty is 7/4 favourite to takeover the reins as AIB announced its senior managers – chairman Dermot Gleeson, chief executive Eugene Sheehy and finance director John O’Donnell were to quit their jobs. Doherty was a strong contender last time.

While there is speculation the bank will go outside the group to find Sheehy’s replacement, Paddy Power is giving odds of 1/2 that the replacement will be an outsider.

Internal candidates Robbie Henneberry, at 9/4, and Donal Forde, at 10/1, are on the list of potential successors, followed by Citibank’s Aidan Brady, at 4/1, DAA chief Declan Collier, at 10/1, and Glen Dimplex boss Sean O’Driscoll, at 12/1.

Paddy Power also has former Irish Life & Permanent chief Denis Casey and former Anglo boss David Drumm in as long shots for the post, at 100/1, reflecting the circumstances under which they were forced to resign from their previous positions.

With tongue in cheek, the bookmaker says former Allfirst bank trader John Rusnak, jailed for losing the bank close to €700m in bad market trades, tops off the rank outsiders at 250/1.

Expanding on his earlier comments, Mr Gilvarry warned the cap of €500,000 for the hot seat in AIB would make it difficult to attract top calibre bankers.

At €500,000 the pay cheque on offer represents just €35.71 for each of the 14,000 employees under his or her charge.

Mr Gilvarry said: “This is a very responsible job and if they don’t give some recognition of that in the salary on offer, they will struggle to attract anyone of substance from overseas, where good bankers are at a premium as the financial sector scrambles to get their banks back on track.”

One analyst, who asked not to be named, agreed the cap on the salary would hurt the recruitment process.

But, in the current market, the analyst added expectations may have been lowered and the job could attract a wide variety of good applicants.

The criticism Bank of Ireland got for appointing Richie Boucher, its head of retail banking, as Brian Goggin’s replacement suggests AIB will be forced to find somebody from outside the bank, analysts said.

The betting from Paddy Power tends to back the view that the rate for the job will militate against that happening.

The appointment of Dan O’Connor as chairman of AIB is regarded as a good move in the interim, however.

His previous track record with GE Global Consumer Finance earned him the respect of international bankers.

Well regarded internationally he is seen as someone who will play a critical role in steering the bank to better times once this global crisis has passed.