6,400 staff at bailed out banks earn over €100,000

There were 6,406 staff in the covered banks earning average salaries of €100,000 and over at the end of December last year.

According to a Mercer report into pay at Irish banks, at State-owned AIB, there are 2,199 staff at senior management level on total average remuneration packages of €108,000.

There were 3,326 staff at Bank of Ireland at the same grade on an average of €96,600, and 271 staff at Permanent TSB on an average of €109,000. IBRC has been liquidated since the report was completed.

There are 118 AIB executives on average salaries of €230,000; 103 executives at Bank of Ireland on €250,000; and 20 at PTSB on €220,000. There are eight AIB senior executives on packages averaging €434,000; eight at Bank of Ireland on €517,000; and nine at PTSB on €269,000.

The chief executive at AIB is on a package of €488,000; €776,000 at Bank of Ireland; and €460,000 at PTSB.

The issue of bank pay caused a political storm last October when it emerged that seven IBRC executives were on packages of more than €500,000. Furthermore, over 15 former AIB executives were on gold-plated pensions even though the Government had pumped €21bn into bailing out the State-owned bank.

The Government came under huge pressure to claw back the pensions of former bank executives. On legal advice, Finance Minister Michael Noonan said this was not possible. Instead, he commissioned a report into pay levels across the banking sector.

Mr Noonan has now ordered Bank of Ireland, AIB, and Permanent TSB to cut pay and pensions by between 6% and 10% in an effort to reduce the overall cost base and return the sector to profitability.

The head of the Irish Bank Officials Association, Larry Broderick, was furious at the report.

“The Government’s demand for further cuts is totally unacceptable. Like many other workers, bank employees have taken considerable pain in recent years — in the form of significant reductions in remuneration as well as substantial job cuts,” he said.

Moreover, the association is demanding improved redundancy terms for IBRC staff. However, according to sources, IBRC staff will not be able to get anything more than statutory redundancy payments because they are unsecured creditors.

If the Government showed them preferential treatment it would leave itself open to legal action from other IBRC unsecured creditors.

There has been an average increase in basic salaries at the three banks of between 4% and 6% since 2008, but because bonuses have been scrapped, total remuneration packages are down by an average of 6%-11%.

All three covered banks are still loss-making and need to further reduce their cost bases, said Mr Noonan.

Spokespersons for AIB, Bank of Ireland, and PTSB say they have noted the Mercer report and the banks will continue to reduce payroll costs.

They are scheduled to meet Mr Noonan over the coming weeks to agree a timeframe for when the cuts can be achieved.