Ireland considering raising CEO salary cap for AIB

DUBLIN, Sept 25 Sun Sep 25, 2011 2:25pm EDT

DUBLIN, Sept 25 (Reuters) - Ireland's Finance Minister Michael Noonan is considering a request from state-controlled Allied Irish Banks (AIB) (ALBK.I) to appoint a new chief executive with a salary above the current cap of 500,000 euros, a finance ministry spokesman said on Sunday.

"News that the government is even considering the AIB request to sanction a salary in excess of 500,000 euros will be greeted with shock and disbelief," Michael McGrath, the finance spokesman for the opposition Fianna Fail's party, said in a statement on Sunday.

A spokesman for AIB declined to comment.

AIB's executive chairman, David Hodgkinson, told a parliamentary committee earlier this month that the bank may have to offer a salary of up to 690,000 euros to attract the right candidate for the CEO role.

The finance ministry spokesman for Noonan said, however, that current government policy allows for no more than an annual salary of 500,000 euros for bank executives.

A government-appointed body had recommended a maximum salary for bank CEOs of 690,000 euros in 2009 but the previous finance minister, Fianna Fail's Brian Lenihan, had capped it at 500,000 euros amid widespread public anger at how reckless lending at Irish banks had triggered an economic meltdown.

AIB, which was effectively nationalised late last year, has been without a CEO or managing director for nearly 12 months.

Last week, an Irish newspaper said two men were in the running for the AIB job; Brendan McDonagh, a former head of HSBC's (HSBA.L) North American operations and David Duffy, who has held international roles with ING Barings and South Africa's Standard Bank (SBKJ.J). [ID:nL5E7KI0BX] (Reporting by Carmel Crimmins; Editing by Diane Craft)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.