BoI can break €500,000 pay cap if next chief is external

Bank of Ireland can break the €500,000 salary cap for its next chief executive only if the appointment goes to an external candidate, Taoiseach Enda Kenny has confirmed.

He told the Dáil the €500,000 salary cap will remain in place if an internal appointment is made but signalled more flexibility for the bank if the appointee comes from outside the bank.

He was responding to Social Democrats TD Catherine Murphy who expressed concern that Minister for Finance Michael Noonan was considering relaxing the cap on pay to "facilitate a huge salary for Bank of Ireland's new chief executive".

Mr Kenny told her “the situation is that the cap remains and if the person to succeed the current chief executive comes from the internal panel, the cap will still remain in place”.

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But he also said: “If the Bank of Ireland wishes to negotiate up to the level of the current chief executive with an effective suitable appropriate person from outside, then it has that opportunity.”

Appointment

Chief executives of bailed-out banks have had their pay capped at €500,000 but Bank of Ireland's boss Richie Boucher has been above that level since his 2009 appointment.

His salary was €690,000 last year, but total compensation, including pension contributions and a car allowance, reached €958,000 in 2016.

The State has a 14 per cent stake in Bank of Ireland but owns 99.9 per cent of AIB.

Ms Murphy warned that no decision on the sale of shares in Bank of Ireland should be made without majority support in a Dáil vote.

Ms Murphy added that it should not be an “arbitrary decision” by the Taoiseach or Minister for Finance based on advice “of some of the experts and consultants who stood on the sidelines cheering the boom, many of whom have benefited considerably from advising on how to manage the wreckage of the bust”.

But Mr Kenny said it was part of the programme for government that there should be a sale of up to 25 per cent of AIB. The Minister had made that “perfectly clear on numerous occasions and is proceeding through the process of bringing that to a conclusion”.