Banking pay caps must be retained, says D’Arcy

Junior finance minister Michael D’Arcy has insisted the €500,000 annual banking pay cap should be retained, despite increasing pressure from institutions to relax the rules.

The cap has been in place since the State took control, either partly or entirely, of six banks a decade ago.

Finance Minister Paschal Donohoe is currently considering whether the cap should be lifted and whether bonuses should be allowed again.

Mr Donohoe received a report by headhunters Korn Ferry on the issue but has not yet made a decision on whether to lift the caps.

However, speaking in New York to the Financial Times, Mr D’Arcy said he felt the caps are appropriate.

“The senior executives are on very large salaries and as long as the State owns [their banks], I’m satisfied the pay caps are appropriate,” said Mr D’Arcy, describing bankers’ pay as “the very, very top percentile of salaries in Ireland”.

“We have come through a pretty difficult decade — banking bonuses, as you know prior to the previous collapse, they were not a helpful factor.”

He also ruled out a further sale of the Government’s stakes in AIB and Bank of Ireland before the UK leaves the EU on October 31.