The Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, updated Cabinet this week in relation to the terms of reference for the Government’s planned review of bank remuneration policy.
Minister Donohoe said: ‘Government policy on banking remuneration has remained unchanged since the financial crisis and impacts c.23,000 staff across AIB, Bank of Ireland and PTSB. I indicated recently in light of changes in the economy and the potential impact of Brexit on the financial sector, my intention to carry out a review of banking remuneration policy to determine if it remains fit for purpose. I am therefore today outlining the terms of reference for the review which will be carried out by my Department with the assistance of an external consultancy firm which will be appointed shortly. I expect to complete the review towards the end of this year.’
The review is not limited to but will include an analysis of current bank senior executive compensation arrangements in AIB, Bank of Ireland & Ptsb with a comparison against both those in the Irish market and an appropriately selected European peer group and will, where appropriate, include relevant benchmarking analysis in terms of compensation quantum and composition.
There will also be a review of general compensation arrangements across junior and middle ranks in the retail and commercial banking sector in Ireland with a focus on the structure and composition of compensation there.
ENDS
Notes to editors
A consultant will be appointed following the completion of a mini competition run by the Shareholding and Financial Advisory Division (SFAD) of the Department of Finance. Prospective tenderers will be drawn from the Department’s Advisory Panel (Panel Two) which was constituted via open procurement in October 2014.
The restrictions on bankers pay are far-reaching and include all forms of variable pay and impact c. 23,000 staff across the three banks in which the State has a shareholding.