News was full of the proposed salary of the new Chief Exec of AIB this morning. The start of the morning made it appear that the Government were due to be steamrolled into making an appointment. By lunchtime it appeared that the Government’s proposed cap on banking salaries would hold. Minister Lenihan appeared to confirm that no one would be appointed at over €500k.
With this in mind it does appear pretty unlikely to be that this appointment will go ahead at the proposed salary. Thank God. With all of the focus on wage restraint and reductions the moral ground of the Government would be destroyed. It is not like people need another hate figure – but they would have got one if this appointment had gone ahead.
The big story for me is not that the banks failed in their attempt to force this move through. The key thing is that they actually tried. Remember this is the week after the passage of NAMA through the Oireachtas. It is weeks after another wage increase went through for some bank staff.
The other story here, though far less sexy, is the corporate governance issue. The bank is proposing to merge the posts of Chairman and Chief Executive. This goes completely against all of the learnings on corporate governance. It again, uncomfortably, shows the huge power at the bank’s disposal.