AIB appoints Duffy to succeed Hodgkinson as top executive

AIB HAS announced the long-awaited appointment of a new chief executive, naming David Duffy as the successful candidate, on a salary of €500,000, the Government’s pay cap for bankers.

Mr Duffy, a native of Dublin who has spent his career working overseas in banking, will take over as chief executive next month, when executive chairman David Hodgkinson will revert to the role of non-executive chairman.

The top role at AIB has been vacant since Colm Doherty stood down as managing director in November 2010 after the second State bailout of the bank. The Department of Finance said the Government told AIB yesterday that it had “no objection” to the decision of the AIB board to nominate Mr Duffy as its “preferred unanimous choice”.

Minster for Finance Michael Noonan said he wished Mr Duffy well in “the very important role of reinvigorating AIB”.

Mr Hodgkinson said he was “ideally suited” to the task of leading AIB’s extensive restructuring.

“He brings with him a wealth of experience and a sound knowledge of the local market,” he said.

“He also has a proven track record in successfully managing banks through challenging times.”

An AIB spokesman said Mr Duffy would receive no benefit-in-kind payments beyond his pay and the bank will pay an employer contribution to his pension amounting to 15 per cent of pay.

He is joining on a three-year contract with an option to renew it by mutual consent. The contract has a six-month notice period.

He is entitled to expenses for relocation and accommodation costs for a period of three months, subject to a review by the board.

He will not be paid any long-term incentive payments as part of his package, the spokesman said.

This is despite AIB seeking permission from the department to include him in any future Government-approved incentive plans.

One of the first major tasks facing Mr Duffy will be where he will seek the 2,000 redundancies already announced by the bank.

AIB was effectively nationalised in July, with the State taking a stake of more than 99.8 per cent, after injecting €20.7 billion into AIB and its subsidiary, EBS.

Mr Noonan said the Government wanted the bank to recruit a candidate “of the highest calibre so as to yield the best possible return to the taxpayer”.

Educated at Terenure College and Trinity College Dublin, Mr Duffy (50) worked at Goldman Sachs, Dutch bank ING and South Africa’s Standard Bank.