Minister and Regulator disagree on bankers’ pay

In comments made at the MacGill Summer School do get noticed, as a rule and this week is no exception.

In comments made at the MacGill Summer School do get noticed, as a rule and this week is no exception.

The Financial Regulator Matthew Elderfield suggested on Monday afternoon that the Government scrap the current €500,000 salary limit for senior bank executives at the country’s rescued banks.

The regulator told reporters in Glenties: “Irish taxpayers are probably going to own all the banks and, in order to refresh and bring in some fresh talent, I think it is going to be important to bring in some outsiders to the management.

“If we own the banks we want to get our best value out of them. Not having any barriers to that is going to be important, so looking at the remuneration structures for the banks is going to be important.”

When asked what salary cap would be appropriate, he said the existing EU standards provide “a good starting point”.

AIB Chief David Hodgkinson said this week that he supported the removal of the salary cap. “You’re not going to get the full slate of candidates you’d wish to have” without it, he said.

During the debate in Glenties, Minister of State for Finance Brian Hayes said he was against easing the salary limit.

“Our banking system is still in the AE ward, we’re not in normal territory.”

He said that a return to the old system would be “anathema to the Government”,

Speaking in the Oireachtas on Tuesday night, Finance Minister Michael Noonan agreed that the removal of the salary cap was a non-starter.

“Matthew Elderfield is independent and he is entitled to his view, but I don’t agree with that view,” he said.