AIB confirms Duffy is new chief

AIB HAS formally named David Duffy as its chief executive, confirming media speculation.

The nationalised bank has been without a formal chief executive since last year’s departure of Colm Doherty, but has been headed up by executive chairman, David Hodgkinson in the interim period. Mr Hodgkinson will remain on the bank’s board in the role of non-executive chairman.

While there had been some concern that AIB’s new chief could be paid nearly €200,000 more than the existing €500,000 salary cap for Irish senior banking executives, the Department of Finance yesterday confirmed that Mr Duffy’s remuneration will fall within the set limit — Finance Minister, Michael Noonan, saying that the Government “is pleased that the remuneration policy set down by the previous Minister for Finance, Brian Lenihan, in capping the salaries of bank CEOs has been applied to this appointment.”

Similarly, the anticipated series of long-term incentive scheme add-ons to the salary seem not to have materialised.

The terms for the new job include a fixed term contract of three years, although there is an option to renew Mr Duffy’s tenure for a further three years “by mutual agreement“.

“There are no benefit-in-kind payments such as medical, club membership or car allowances [and] if any occur they will be provided for within the €500,000 cap,” the Government said.

An employer pension contribution of 15%, along with an employee contribution of 5% to be paid in to the bank’s defined contribution pension scheme and “vouched reasonable expenses for relocation costs to Ireland and provision of accommodation for a period of three months, subject to board review“, round out Mr Duffy’s conditions.

Commenting on Mr Duffy’s appointment,, Mr Hodgkinson said: “He brings with him a wealth of international experience and a sound knowledge of the local market. He also has a proven track record in successfully managing banks through challenging times.”

A graduate of Trinity College Dublin, Mr Duffy has previously worked for the likes of ING Barings — where he was global chief operating officer and head of the group’s American operations — Goldman Sachs International, and Standard Bank Group in London, where he was chief executive.

In 2007, AIB’s then chief executive earned a basic salary of €916,000 and an annual bonus of €850,000.