AIB has picked internal candidate Colin Hunt as its next chief executive, succeeding Bernard Byrne, who announced in October he was quitting to join stockbroking firm Davy.
Mr Hunt (48) joined the bank in September 2016 as managing director of wholesale and institutional banking, having been poached from Australian banking group Macquarie, where he headed up the Irish operation. A former chief economist at Goodbody Stockbrokers, Mr Hunt also previously worked as special adviser to former ministers for finance and transport.
Remuneration
“Colin is an outstanding executive whom I am looking forward to working with even closer in the future,” said AIB chairman Richard Pym. “ This proposed appointment also ensures continuity of the current successful strategy for the bank.”
The development comes as the Department of Finance is set to receive a draft copy next week of a report it commissioned into remuneration across bailed-out plans, according to sources, which is expected to call for a relaxation of pay restrictions and return of bankers' bonuses.
Sources had said that promoting an internal candidate as AIB’s next CEO was the easiest route, given the pay limitations as well as the notice period and more-lengthy regulatory approval process that an outsider would have to go through. Mr Hunt has commenced the required regulatory fitness and probity assessment, with his appointment expected to take effect “early next year,” AIB said.
Mr Byrne, who is joining stockbroking firm Davy's capital markets division next year while his chief financial officer Mark Bourke prepares to take on a top role at Portuguese lender Novo Banco early in 2019, told The Irish Times in October the group had lost a "mid-teens" percentage of almost 200 of its most senior managers since AIB returned to the main Dublin and London stock markets in June last year.
Mr Byrne signalled at the time that turnover of senior staff was higher than normal and “accelerating” as overseas financial firms prepare to move operations to Dublin as a result of Brexit.
Bonus
Bloomberg reported on Friday that AIB, which had plans to reintroduce a long-term incentive plan for top executives voted down last April by Minister for Finance Paschal Donohoe at the group's annual general meeting, is considering a second effort to push the bonus plan through next year.
The Government-commissioned bankers remuneration report, being carried out by Korn Ferry, one of the world's largest headhunting firms, is set to propose relaxing rules which have limited salaries at most bailed-out banks since 2009 at €500,000 per year, while banning bonuses, it said.
Bank of Ireland chief executive Francesca McDonagh is an exception, on an annual salary of about €950,000. She has previously called for a "normalisation" of remuneration in the sector.
“The review process is ongoing and the report, which is currently being drafted, will be reviewed by officials before being submitted to the Minister for his consideration,” a spokesman for the Department of Finance said on Friday.
Sources said that an initial version of the report is due to be submitted to the Department next week.
Currently, any bonus plan involving a bailed-out Irish bank is subject to an effective tax rate of 89 per cent, as a result of a measure injected into the 2011 Finance Act.
