State signed off on banker’s €500k pay

The Government has come under pressure to further reduce bankers’ salaries after it emerged that the finance minister recently signed off on a half a million euro pay package for a risk officer at the former Anglo Irish Bank.

The Department of Finance last night confirmed that Michael Noonan had recently agreed to a €500,000 pay package for Kevin Blake, the new chief risk officer at the Irish Bank Resolution Corporation (IBRC).

Mr Blake’s appointment brings to seven the number of senior executives at the bailed out bank who are on pay packages exceeding €500,000. The new risk officer begins his job at the bank today.

Tánaiste Eamon Gilmore said last week that it was not acceptable to have people on such salaries in covered banks.

But a spokesman for Mr Noonan last night defended Mr Blake’s pay package.

“He was hired under the existing cap. The bank is still a commercial entity. There’s a lot of work to be done winding it down,” the spokesman said.

But Sinn Féin deputy leader Mary Lou McDonald said the public had no appetite for such state-paid salaries.

“The Government’s position on this is completely threadbare at this stage.

“They’ve said there’s nothing they can do, they’re choosing to take a hands-off approach to this. They need to change that position.

“Their credibility, when they talk about sharing the burden and fairness, is completely shot when you see the like of that happening. I wish the Government would sort this out. But I don’t think there’s the political will to do so,” she said.

Consultants Mercer has been appointed to look at the pay scales at all levels in covered banks, a review which is not expected to be finished until next year.

The Department of Finance has said that Mr Noonan will discuss pay levels at IBRC with its chairman Alan Dukes, a former Fine Gael leader. Those talks will be informed by the findings of the bankers’ pay review.

Meanwhile, the Government will this week receive the mid-term fiscal outlook, which will outline growth projections for 2013 ahead of the budget.

The outlook is expected to be released on Wednesday.