Voluntary system to cutbankers’ pay ‘inadequate’

A voluntary system to cut bankers’ pay would be “wholly inadequate”, the Government has been warned as it prepares to publish a report that says remuneration in Irish banks is not out of line with other countries.

Fianna Fáil’s spokesman on finance, Michael McGrath, said those on very generous pay at bailed out institutions should see their salaries cut. “The Government would get a great degree of support if they did this and it would show some solidarity with the Irish people who have made great sacrifices to fund Irish banks,” he said.

The long-awaited report by Mercer Consultants is with the finance minister, Michael Noonan, and is expected to go before Cabinet soon. Despite it finding that pay is not out of line with banks in other countries, the Government is expected to make some attempts to pressurise bailed-out banks to reduce pay levels. The Government will seek the cuts as part of plans to return the banks to profitability and increase the value of the State’s shareholdings. It will also be politically important to be seen to be tough on bankers’ pay at a time when public servants are considering cuts to their earnings under the new Croke Park deal.

Mr McGrath said: “It’s impossible to compare pay in Irish banks with other jurisdictions given the amount of public money that has gone into Irish banks, and that has to be borne in mind when framing any remuneration policy.”

Almost 3,000 staff in the State’s four bailed-out banks are earning more than €100,000 a year. Among those, 27 earn more than €500,000 a year — 20 in Bank of Ireland and seven in the former Anglo, IBRC.

Mr McGrath said cuts to pay at a very senior level must be imposed by legislation because a voluntary system would be “wholly inadequate”.