AIB management pay - Cap should apply to all bank staff

Last February Minister for Finance Brian Lenihan announced a cap on the salaries of bank chief executives under the bank recapitalisation scheme, which ultimately saw the state take 25% stakes in the banks in return for a capital investment of €3.5 billion. It would seem this proposal was not thought out properly.

The salary of the chief executive was to be capped at €500,000 while officials working under him could be earning more. The absurdity of the situation became apparent with the appointment of Colm Doherty from within Allied Irish Banks where he earned €630,000 last year.

The Government had indicated that it did not want an internal appointment from within AIB, but after a trawl of external and internal candidates, the board of the bank decided that Mr Doherty was the best candidate for the position. It was suggested that external candidates had turned down the job because the salary was capped at €500,000.