THE GOVERNMENT could only consider breaking the salary cap of €500,000 for a new chief executive of AIB if an exceptional case was made, Taoiseach Enda Kenny has said.
Mr Kenny said yesterday that “really exceptional circumstances” would have to be involved before it would breach the salary cap, in place since March 2009.
The Taoiseach, speaking in Galway yesterday, said that Minister for Finance Michael Noonan would report to Cabinet colleagues on the application lodged by AIB requesting that the salary paid to the incoming chief executive of the bank should exceed €500,000. Over the weekend, Mr Noonan disclosed that he had received a formal request from the bank on lifting the salary cap. Using similar language to Mr Kenny, he said lifting the cap could only occur if an exceptional case was made. However, he did not categorically rule it out.
Mr Kenny said yesterday he and his Cabinet colleagues would await Mr Noonan’s assessment of the request before committing itself to a position. Fine Gael, while in opposition, argued that the salary cap for chief executives of bailed-out Irish banks should not exceed €250,000.
Fianna Fáil finance spokesman Michael McGrath said yesterday he was disappointed at Mr Noonan’s response and would have expected him to instruct AIB to appoint a new chief executive within the salary cap.
Mr McGrath, speaking on RTÉ, said it was important that the bank found the best possible candidate to restore it to profitability and return some money to the taxpayer. He said even with a cap on the salary, other benefits would bring the overall remuneration package of a chief executive to close to €1 million.
“When you consider the real hardship that Irish families are facing today and consider the money that has been put into that bank, then AIB should find somebody willing to be paid €500,000,” he said.
A number of prominent Labour members also warned about the consequence of exceeding the cap, signalling that there would be tensions within the Coalition if the Government acceded to AIB’s request.
Dublin North East Labour TD Tommy Broughan said the request should be rejected out of hand. “AIB is now in State ownership and has needed to have billions of taxpayers’ money pumped into it to keep it afloat. It is outrageous of the company’s senior management to now apply to have the already far too generous €500,000 salary cap lifted.
“The spurious explanation for this outrageous request is the level of salaries in private sector banks. But the appalling failure of those institutions in Ireland, the UK, the US and many,” he said.
His party’s byelection candidate in Dublin West, Patrick Nulty, said it would be “absolutely scandalous” and obscene if the request was accepted.
“The board of AIB need a reality check. Families on moderate incomes are working day and night to make ends meet and yet this bank is saying they cannot find a CEO who will work for half a million euro a year,” he said.