Banks fail to impress with variable payment to employees – says FSU

05 March 2024

Banks need to treat stakeholders and shareholders as equals – says FSU

The Financial Services Union (FSU) has described the announcement by AIB to award employees a payment of 4.4% in variable pay as marginally better than other banks but still underwhelming and called on all Banks to treat stakeholders and shareholders equally.

AIB today announced that every employee, subject to the eligibility criteria, will be entitled to a 4,4% payment that can be taken either in a taxable once off lump sum payment through payroll or through a share purchase scheme.

Commenting on the announcement John O’Connell, General Secretary of the Financial Services Union said :

Over the last nine days our two pillar banks have announced combined pretax profits of over €4.5billlion and nearly €2.9 billion in share buyback and cash dividends to shareholders. This contrasts with their attitude to fair reward for employees as both banks have decided independently to reward their employees with a variable payment of 4% (BOI)  and 4.4% (AIB).

The former Minister for Finance, Pascal Donohue TD and former Taoiseach, Michael Martin TD  were clear in the Dail when they announced the relaxing of the rules on variable pay that ordinary bank staff should be the main beneficiaries of the rule changes.

If Banks want to compete with firms in the wider financial services sector in attracting and retaining staff, they need to treat employees as significant stakeholders and reward them fairly.

The return of variable pay was an opportunity for AIB and BOI to show they were taking seriously the concerns their employees were expressing about the effects of the  cost-of-living crisis and the need for fair reward.

The FSU will be asking our reward specialist to investigate the criteria applied by  both AIB and BOI when making the decision on variable pay and to ensure the payment is properly benchmarked with payments in the wider financial services sector.

Commenting Billy Barrett, Senior Industrial Relations Officer in the FSU with responsibility for AIB said:

“With bank profits at record highs, we believe AIB should be doing more for its employees. It is our view that our members who are at the core in delivering for the Bank, should benefit to the same extent as shareholders.

We will be making our views known to the Bank this week and will be reaching out to members to hear their views.”

In conclusion Mr O’Connell said

“The FSU have made the case for worker and consumer directors to be appointed to the boards of our main banks.

The employees voice needs to be heard when crucial decision are been made which impact staff and a consumer voice is vital when the future of banking is being discussed.

We would ask Minister Michael McGrath to look at this option as a matter of urgency.”