Gormley: €2m salary admission ‘a PR disaster’

BANK of Ireland chief executive Brian Goggin’s televised admission that he would still earn close to €2 million this year was a “PR disaster” which sent out all the wrong signals, Green leader John Gormley has said.

But Mr Gormley insisted politicians’ pay and expenses were not scandalous, although he conceded there was much public anger about this issue, too.

“It is not a source of scandal, but it is a source of anger,” he said on the issue of political remuneration. “I have called for reform of the system of payment to politicians and that is going to happen.” Mr Goggin’s admission came during an interview with RTÉ’s Six-One News programme on Thursday night. In the interview, he said his pay this year would be “substantially down” on his 2008 package of circa €2.9m to “less than €2m”.

The timing of the interview was bad for the Government, coming just 24 hours after it announced it would pump €7 billion of taxpayers’ money into Bank of Ireland and AIB under its recapitalisation scheme.

As part of the scheme, Finance Minister Brian Lenihan said the pay of senior executives at Bank of Ireland and AIB would be cut by “at least 33%” as a first step, with bonuses also ruled out.

But Mr Goggin’s interview the following night showed that some of the salaries in the banking sector remained high. “I do feel that the interview that Mr Goggin gave on the six news was a PR disaster,” Mr Gormley admitted. “It sent out all the wrong signals... And a lot of people have said to me that €2m a year is really like winning the lotto for most people. That is out of the question. There will be a cap, a severe cap [and] no bonuses paid to bankers,” Mr Gormley said.

The Government is expecting an expert report on remuneration in the banks shortly and is expected to take further steps at that stage to curtail executive pay.

He also pledged reform of the regulatory system and raised the possibility an international expert would be appointed to regulate the banks. In the meantime, the Government would grant the Director of Corporate Enforcement Paul Appleby any additional powers he needed for his ongoing investigation of controversies in the banking sector. Mr Gormley said there was an unfortunate “tolerance” of white-collar crime in Ireland that had to change.

“The poor sap who goes into Dunnes Stores who steals a loaf of bread is up in front of the courts. On the other hand, people who cause very serious damage to our international reputation would appear to act without impunity, and that situation cannot continue,” he said.

But he refused to comment on individual cases currently under the spotlight stating “... the last thing I want to do... is to allow high-paid lawyers to get people off the hook because we’ve somehow prejudiced someone’s trial. That’s not going to happen”.

Mr Gormley conceded, meanwhile, last week’s TNS mrbi poll, which showed widespread dissatisfaction with the Government, had been disappointing. The Greens remained static on 4%, when Mr Gormley had been expecting an increase.