‘Obama-style’ cap could halve executives’ pay

SALARIES of top bankers could be halved as part of a deal to inject e7 billion of tax-payers’ money into Bank of Ireland and Allied Irish Bank (AIB).

Finance Minister Brian Lenihan said he would like to see an “Obama-style” cap in pay to senior executives, which in the US amounted to a $500,000 (e387,837) salary cap as part of its bailout deal.

The bank recapitalisation package unveiled last night includes a decision to reduce the remuneration of senior executives at both Bank of Ireland and AIB by “at least 33%”. Mr Lenihan later added the cuts would reach up to 50% in some cases. Bonuses will no longer be paid to executives as part of the recapitalisation package and there will be no salary increases in 2009 or in respect of those that were agreed in 2008. “I want to see definite caps on the remunerations of senior executives,” the minster said. He added he has written to the board of a special committee now examining the issue of bonuses and pay, asking it to make proposals on what the salary cap should be.