SuperValu-owner Musgrave’s chief financial officer Myles O’Grady is leaving for a “unique leadership opportunity”, sparking speculation that he is rejoining Bank of Ireland to take the lender’s helm.
Mr O’Grady joined Musgrave from Bank of Ireland earlier this year, prompting it to blame Government-imposed pay caps for his departure.
Bank of Ireland’s chief executive Francesca McDonagh is due to leave the business shortly to head Credit Suisse’s Europe, Middle East and Africa division.
While neither Musgrave nor the bank would say where Mr O’Grady was going, reports have tipped Mr O’Grady as one of several likely successors to Ms McDonagh.
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Musgrave, owner of the SuperValu, Centra and Donnybrook Fair supermarket franchises, confirmed on Monday that Mr O’Grady was leaving for a “senior role” in a non-competing industry. Mr O’Grady said he was taking up a unique “leadership opportunity” that offered him the chance to “achieve great outcomes” for stakeholders and broader society.
Noel Keeley added that the group appreciated that Mr O’Grady had a unique opportunity. “While Myles was with us for a short period, he made a valuable contribution to the business during that time,” he added.
Mr O’Grady is one of several likely candidates for the top job in Bank of Ireland. Others include Alicia Reyes Revuelta, former head of US lender Wells Fargo’s European operations.
Analysts noted that the chief financial officer was “popular with the markets” when Bank of Ireland revealed that he planned leaving 11 months ago.
Announcing Mr O’Grady’s departure last September, Ms McDonagh argued that a Government cap on bankers’ pay limited the industry’s ability to hire and keep talented executives. “The lack of a level playing field means Bank of Ireland is at a competitive disadvantage to other companies, corporates and PLCs who are not restricted in the same way,” she said.
Government imposed the cap which limits executives’ basic pay to €500,000 a year following the financial crash in 2008 that sent the Republic into a sustained recession and left the State insolvent. Many blamed banking executives’ high salaries and bonuses tied to short-term performance targets for helping to fuel a property bubble that burst, ultimately forcing taxpayers, the EU and the International Monetary Fund to bail out Irish financial institutions.
Bank of Ireland avoided wholesale nationalisation, so its chief executives are shielded from the cap. Ms McDonagh earned €950,000 last year. However, the bank has to limit other executives’ pay.
The State has cut its stake in Bank of Ireland from 13.9 per cent after the crash to less than 3 per cent, while the institution has repaid the €4.8 billion State bailout and returned a total of €6.5 billion to the Exchequer.
However, Minister for Finance Paschal Donohoe recently confirmed that the Government was not considering lifting the industry’s pay cap.
Ms McDonagh joined Bank of Ireland as chief executive five years ago. During her tenure she led the lender’s takeover of Davy Stockbrokers last year after a bond trading scandal forced the firm to put itself up for sale.
Bank of Ireland also took over KBC’s €9 billion Irish loans after the Belgian bank announced that it was leaving the Republic.
