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Is it time to scrap the Irish banking €500,000 pay cap?

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  • 29-09-2021 11:26am
    #1
    Registered Users Posts: 148 ✭✭


    This is an extract from an article in today's FT:


    Bank of Ireland’s chief financial officer latest big name to jump ship due to €500,000 limit, a legacy of banking crisis


    When one senior Irish banker working abroad was considering moving back home, he ran into an insurmountable hurdle: his pay packet.


    “There was an opportunity I looked at pretty hard,” he said, asking not to be named. But he would have had to take a “very severe” pay cut and “that was one of the reasons I turned it down”.


    Since the eurozone’s biggest banking bailout more than a decade ago, Ireland’s three high-street banks have been obliged by law to cap top executives’ salary at €500,000. Furthermore, the rules prevent some 23,000 staff, from the most junior to the most senior, from getting any bonuses or other benefits including health insurance and childcare.


    It goes on with people in finance lamenting the pay cap and also headhunters describing the difficulty in hiring good people for roles in Ireland.


    It concludes..


    And with leftist nationalist party Sinn Féin polling top of voter preferences for Irish elections due by 2025, top executives see little change on the horizon.


    “It’s going to get worse soon if Sinn Féin get in,” said the headhunter. “They’ll care even less.”


    What is the consensus on bankers pay in Ireland?

    Post edited by Jim2007 on


Comments

  • Registered Users Posts: 4,310 ✭✭✭arctictree


    I thought the Irish banks were very profitable. Why do they need a payrise?



  • Registered Users Posts: 148 ✭✭Eclectic Econometrics


    Purely devil's advocate, I would guess the argument would be in order to stay profitable they need to attract the best C-suite and the cap of half a mil makes that hard.



  • Registered Users Posts: 1,474 ✭✭✭jim o doom


    Irish banks are full of mismanagement and financial waste. Source? I am close with people who have worked, or still work, in large Irish banks.

    Paying their executives tons of money makes zero sense. Some of their systems and practices are borderline unfixable. Legacy computer systems they seem unable to upgrade, millions wasted on new systems that are not suited to purpose.. yeah that's a very, very hard no from me.

    What could it lead to? further risky lending practices so that the banks can reap larger profits, allowing executives get larger bonuses or pay. I don't think that needs to be encouraged either.



  • Moderators, Science, Health & Environment Moderators Posts: 19,615 Mod ✭✭✭✭Sam Russell


    The Irish financial institutions still owe for the bank caused financial crash and subsequent bail out. The still carry forward losses that give them zero corporation tax for the foreseeable future. That should be limited to 10 years carry forward.

    What do these chiefs do in the bank that gives them such high rewards? They were paid a lot of money before the crash, and still the banking system crashed, so high salaries and massive bonus pay outs did not prevent the crash, so what guarantee is there that large pay and bonuses will not give rise to another crash?

    It is a NO from me.



  • Registered Users Posts: 13,186 ✭✭✭✭jmayo


    Ahh the poor crature.

    He wants to come home, but can't earn a fortune from a bank that only exists thanks to the money granted to it by the bunch of idiots we called a government on behalf of all taxpayers past, present and future.

    Money that normal taxpayers and citizens of this country end up getting shafted for over numerous years.

    Oh we will get the usual vested interested excusers on telling us the banks have paid a lot of the money back, but they never reference fact we are paying through cut public services, increased borrrowing rates, etc.

    And these would be the same banks that offer shyte services to their existing non debt laden customers, all the while allowing government and their fellow shyters away with millions upon millions of unpaid debts.

    Piece of advice for said high flying banker.

    Stay to fook away, we have had too many so called high flying bankers in the past and all they did was suck us dry.

    I don't recall any of them seeing real jail time for fraud, incompetence, and downright disregard for the economic well being of this state.

    I am not allowed discuss …



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  • Moderators, Category Moderators, Computer Games Moderators Posts: 51,177 CMod ✭✭✭✭Retr0gamer


    I might consider it if they start giving me a non-negative interest rate and bank charges that mean I'm paying the bank to play with my money on the investment market.

    Fix that first. I'll still say no but it's a start.



  • Registered Users Posts: 95 ✭✭Josephfromdowntheroad


    When people in banks are complaining about 500,000 salaries then you know a recession is around the corner.



  • Moderators, Sports Moderators Posts: 26,327 Mod ✭✭✭✭Podge_irl


    I don't recall any of them seeing real jail time for fraud, incompetence, and downright disregard for the economic well being of this state.

    Only one of those is actually a crime



  • Registered Users Posts: 1,792 ✭✭✭BalcombeSt4


    Well then banks should be nationalized, along with the awful health service & also public transport.



  • Registered Users Posts: 68,317 ✭✭✭✭seamus


    Plenty of perfectly competent and driven individuals living in Ireland who'd be more than happy and capable of filling that CFO role for less than €500k.

    Problem is the incestuous nature of company leadership at those levels. They want to hire someone whose name they get through their network of contacts, or that they've worked with before. In other words; a buddy. This has the effect of artificially bigging up executive salaries. The CEO hires his mates and tells the board that this guy is the right, but he needs a big salary. Then the CEO quits, gets hired by another mate, who tells his board that this guy needs a big salary. And you get an effective closed club where salaries keep rising for no reason other than the fact that they don't want to hire from outside the club.



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  • Registered Users Posts: 1,725 ✭✭✭I see sheep


    NO



  • Posts: 61 ✭✭ [Deleted User]


    Irish banking is not rocket science.

    €500,000 should be sufficient to get someone with the required expertise and the board to support and implement a viable strategy.



  • Registered Users Posts: 82,151 ✭✭✭✭Atlantic Dawn
    M


    I think it should go for any bank which has given back all the bailout money it was given.



  • Registered Users Posts: 78,359 ✭✭✭✭Victor


    How about a €510,000 pay cap?



  • Registered Users Posts: 21,535 ✭✭✭✭Tell me how


    Absolutely.

    This focus goes to the heart of what banks and their boards want to see the industry operate as, as a profit first, only, and at all costs model. Ordinarily, there's little argument against letting the market set the rate as it does in other industries, but these banks took massive money to stay solvent at a time when they were supposedly getting the best that money could buy. And it got to the point of the Irish Government having to step in and take ownership of the banks (or as good as).

    And many of them had to be dragged kicking and screaming to acknowledge and pay for the suffering they put individuals and families under as the house of cards fell down and they looked to minimise their losses.

    This is article has the whiff of 'our friends in the media' off of it looking to get the gravy train rolling again as they know an increase at the top level will call for similar increases all down the chain (as far as the door of the corporate level anyway at least, they'll probably hold off justifying wage increases for the bank floor staff).

    Michael Noonan effectively managed the Irish financial system (and the banks under Government control) for 6 years in his early 70's and while dealing with the loss of his wife to a horrific disease. The idea of opening the door to flagrant excess so quickly after the impact of the 08 crash is a worrying one for me.



  • Posts: 1,263 ✭✭✭ [Deleted User]


    Haven't they paid it back yet? I thought they had. Either way, that should be a minimum requirement.

    Banks love splashing the money around, on themselves. How about for every extra 100K they pay to senior execs, they have to contribute 100K to local projects? That way they get their big bag of money, but the country as a whole gets something out of it too...



  • Registered Users Posts: 7,593 ✭✭✭theteal


    Am I the only one taken aback by the health insurance bit? I would expect that as a basic and would be very hard pressed to take a job that didn't offer it - granted a half mil salary would help but I'm not quite at that stage just yet



  • Registered Users Posts: 21,535 ✭✭✭✭Tell me how


    The health insurance line, and the reference to 23,000 staff is a line to try to sway opinion.



  • Registered Users Posts: 33,277 ✭✭✭✭Princess Consuela Bananahammock


    But none is them should be rewarded with pay rises.

    Everything I don't like is either woke or fascist - possibly both - pick one.



  • Registered Users Posts: 2,241 ✭✭✭Mav11


    So long as the State has a significant shareholding, NO. After that it up to the banks and shareholders to decide on salary levels.



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  • Registered Users Posts: 22,389 ✭✭✭✭Akrasia


    In fact the masters of the universe attitude is what caused them to become so arrogant and wreck less in the first place.



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