New AIB chief to be bound by Government’s €500k pay cap

AIB has appointed a new chief executive – but the new boss will still be bound by the Government’s €500,000 pay cap.

Colin Hunt, who joined the bank in 2016, will take over from current CEO Bernard Byrne. Mr Byrne announced in October that he will take up the role of deputy chief executive of Davy Group.

Mr Byrne announced his departure less than a week after the bank’s chairman, Richard Pym, complained that pay restrictions at bailed-out banks meant AIB was a ‘training ground’ for bankers who then moved to higher-paid roles.

Government rules cap salaries at bailed-out banks at €500,000, while bonuses of over €20,000 currently face an effective tax rate of 89%.

The Government still holds about 71% of AIB, 75% of Permanent TSB Group Holdings Plc and 14% of Bank of Ireland Group Plc. AIB had proposed introducing a deferred bonus scheme earlier this year, but this was blocked by Finance Minister Paschal Donohoe. He did, however, commission a report into bonuses – due to be published in the coming months.

Incoming CEO Mr Hunt has held a number of positions in other institutions including Macquarie Capital, Goodbody Stockbrokers, Bank of Ireland and NatWest, as well as serving as a Government adviser.

‘We are delighted that the next proposed leader of AIB has emerged from within our own ranks,’ Mr Pym said yesterday. ‘This appointment also ensures continuity of the current strategy for the bank.’