Minister Donohoe outlines voting intentions at forthcoming bank AGMs & review of remuneration policy

19th April, 2018

Government policy on banking remuneration has remained unchanged since the financial crisis. Extensive restrictions are in place, which, in summary, limit total remuneration for staff in AIB, Bank of Ireland and PTSB to €500,000 (excluding a standard pension contribution). Policy also dictates that bonuses and many other benefits cannot be paid to any staff*.


The Minister for Finance and Public Expenditure and Reform, Paschal Donohoe, has today (Thursday) outlined his commitment to making no change in policy in this area at this stage and reiterates that all remuneration restrictions remain in place. Arising from this, the Minister will abstain from voting on the remuneration resolution being put to the AGM of Bank of Ireland tomorrow (Friday).


In relation to the relevant resolution being put to the AIB AGM next week, as this puts a formal executive share scheme before shareholders for their approval, the Minister intends to vote against this resolution.


In light of changes in the economy and the potential impact of Brexit on the financial sector, it is Minister Donohoe’s intention to carry out a review of banking remuneration policy. This will be done through the procurement of an external consultant to advise the Minister on whether or not policy in this area remains fit for purpose and to advise on how it might be developed in the future.


Commenting on his intention to vote against the AIB resolution next week and to carry out a review of banking remuneration policy, Minister Donohoe said: ‘I recognise the Chairman and Board’s right to put this resolution to all the shareholders of AIB, given their concerns about management retention and incentivisation in what is an increasingly competitive employment market. However I cannot vote in favour of the resolution being put forward next week’.


“Policy in this area must be set by Government. So, what I can commit to today is that my Department will tender for a consultant to examine whether our remuneration policy remains fit for purpose, identify its impacts and update me on how this policy compares in a wider European context. These remuneration restrictions date back nearly a decade and affect in the region of 23,000 Irish bank staff. I acknowledge also that in light of Brexit, policy of this nature could act as a barrier to the retention of staff in some areas in what will become an increasingly competitive market due to the fact that new market entrants will not be subject to this policy consideration.” 


Finally, for the avoidance of doubt the Minister notes that the power to alter the so-called ‘super tax’ of 89% on banking bonuses[1]contained in the Finance Act of 2011 remains with Dáil Éireann.




Notes to editors:


*A summary of banking remuneration restrictions:

  • A total remuneration cap of €500,000, excluding a standard pension allowance
  • No bonuses
  • No new fringe benefits
  • No cash allowances or pension top ups
  • No new commission or incentive schemes
  • No contractual arrangements with executives or directors on termination that provide compensation
  • Restrictions around contractual payments to employees on termination that provide compensation
  • Restrictions on fees payable to non-executive directors


[1] The bonus tax would apply to any remuneration which is variable or not regular salary including an award in shares