Donohoe blocks bankers’ share scheme

THE Minister for Finance has blocked a proposal to introduce a share scheme for executives at AIB.

AIB last month proposed a plan that would be worth as much as 100% of executive’s salary, and would only be activated if the State was able to sell more of its 71% holding.

A resolution for a formal executive share scheme was before shareholders at AIB’s AGM yesterday. The plan had required formal approval from the Minister Donohoe, which he has now blocked.

Under existing restrictions, total remuneration for staff in AIB and PTSB is restricted to €500,000 – excluding a standard pension contribution. The Government policy also dictates that bonuses and many other benefits cannot be paid to any staff.

‘We have a very clear policy of no bonuses, a cap on certain forms of compensation and a very high tax level for additional forms of pay,’ Mr Donohoe told RTÉ Radio 1’s Today with Seán O’Rourke show.

‘That’s going to stay as it is. I have acknowledged that it is possible in the future that the context for bank pay could change, as we’re going to see more and more companies moving to Ireland as a result of Brexit, who will not be subject to wage policy the way I can implement wage policy on our three banks.

‘For that reason it is a matter we should look at, we should review, but it’s not up to banks to determine wage policy,’ he said.

Current pay caps and bonus restrictions, introduced in 2009, months after the State guaranteed the sector, remain in place, pending the outcome of an external review, expected to be completed by the end of the year, Mr Donohoe said.

The chairman of AIB, Richard Pim said yesterday: ‘The vote is an advisory vote and while we all know the Minister has voted against it, the views expressed by all shareholders are important to the board.’