A BID by Finance Minister Brian Lenihan to cap top bankers’ pay at €500,000 a year was derided as “too generous” by opposition parties last night.
Fine Gael and Labour said it would be fairer to link the wage ceiling to the minister’s own entitlements of about €250,000, as the taxpayer was now bailing out the seven institutions in which Mr Lenihan wants to control salaries.
Mr Lenihan defended his decision, saying he had overruled the body charged with setting the rates which wanted to pay finance bosses more.
Executive bank pay in Ireland was found to be “excessive” by the Covered Institution Remuneration Oversight Committee (CIROC) and above the rates in Britain or similar sized firms in Ireland. CIROC had wanted all of the banks to keep pay levels above e500,000.
The review was sparked by public outrage at pay scales in the financial industry, highlighted by the national scorn which greeted former Bank of Ireland chief executive Brian Goggin’s declaration his pay would fall to “less than e2 million” a year.
Mr Lenihan said the e500,000 cap was appropriate as: “We all have to set an example in these difficult times and we have to start at the top.”
However, Fine Gael finance spokesman Richard Bruton accused the minister of “bottling it”.
“I am astonished that Brian Lenihan has decided to allow executives in AIB and Bank of Ireland to continue to draw salaries of e500,000.
“The 1,000 people losing their jobs every day will wonder why the financial institutions being bailed out by taxpayers will now be paying their executives e500,000,” he said.
Labour’s finance spokeswoman Joan Burton said the cap was a “step in the right direction” but still twice as high as it should be.
“Many members of the public will still regard these levels of payment as excessive, particularly having regard to the role played by many senior bankers in creating our current economic crisis. They will still be among the best paid executives in the country,” she said.
Mr Lenihan has written to the seven institutions involved asking for their views on the reform which would see big reductions in pay for their chief executives. At present the salary for AIB is e696,300, Bank of Ireland e1,185,000, Irish Life & Permanent e890,000, while the position at Anglo Irish Bank is vacant.
The lower CIROC recommendations for other institutions to be put forward by the minister would see wages for the chief of EBS go down from €441,000 to €360,000; Irish Nationwide drop from e1m to €360,000 and Postbank from €260,000 to €230,000.
CIROC also recommended that no bonuses should be paid for last year or this year, or for as long as the state guarantee is in place, and called for a review of pension arrangements to see if employees should make a higher contribution.
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