IBOA rejects demand to lift banking salary cap for new AIB Chief Executive

Issued : 15 September 2011

Senior bankers are as far away as ever from recognising the need for a new beginning in Irish banking, said IBOA General Secretary, Larry Broderick. The Finance Union leader was responding to comments by AIB Executive Chairman, David Hodgkinson, that an annual salary in excess of the €500,000 limit imposed by Government might be required to attract a suitable candidate for the vacant Chief Executive's post.

"While AIB employees still wait for detailed information on Mr. Hodgkinson's earlier announcement that over 2,000 redundancies are to be implemented in the Bank, the Executive Chairman is engaged in special pleading with the Oireachtas Finance Committee about the need for additional rewards for the Bank's senior management.

"AIB staff have now been on tenterhooks about their future for eighteen months - and five months since Mr. Hodgkinson's announcement. But they have yet to hear of where the Bank proposes to shed staff and on what terms - or indeed how the Bank will be restructured to meet future challenges. IBOA continues to press the Bank for this vital information.

"AIB staff are becoming increasingly frustrated and demoralised over their treatment at the hands of the Bank. This is an appalling way to deal with employees on whom the Bank (and indeed the taxpayer) will depend to restore AIB to financial health," said the IBOA leader.

"Our members compare the Bank's failure to treat them with due care and respect with its continuing pre-occupation with offering excessive rewards to senior executives - past, present and now future."

"There seems to be a rather dangerous presumption in the Executive Chairman's comments that by exceeding the Government cap of €500,000 a year, the Bank will automatically secure a better Chief Executive. Previous senior managers in AIB and other Irish banks received multiples of the cap figure in times past - but that did not prevent them pursuing policies which brought their institutions to the verge of collapse," he added.