The Australian chief executive office of IBRC has gone on the offensive today to defend salaries at his bank after it emerged that 30 staff are earning basic salaries in excess of €200,000 per annum and after it was first revealed in a parliamentary question that IBRC had told Minister for Finance, Michael Noonan to get lost in April 2012 when Minister Noonan sought a 15% waiver in €200,000-plus salaries. Remember this was four months after Minister Noonan made a similar request to the NTMA and NAMA where there was subsequently 100% compliance with the request.
But stand back for a moment and you will see that employees in the banking sector have been making sacrifices and sometimes without being asked. There are others who have either not been asked to waive some part of extraordinarily large salaries or if they have been asked, they’ve said “no”. And the split is on national lines, with Irish executives waiving salaries and British and Commonwealth executives saying “no”. Here’s an overview.
First up, we have the anomalous position at the Central Bank of Ireland where the Governor, Professor Patrick Honohan is earning 40% less than one of his deputies. The last Central Bank of Ireland annual report revealed that Governor Honohan was paid €276,324 compared with the salary paid to his deputy Matthew Elderfield of €340,000. Not only that, but in 2012 Governor Honohan is gifting a further €63,000 resulting in his annual salary for 2012 being €213,000, nearly 40% less than his deputy. In October 2012 in response to a parliamentary question, Minister Noonan said he had no control over Central Bank salaries and said he had not sought waivers of salary at that bank.
Next up, we have the CEO of AIB, David Duffy, the Dubliner with the mid-Atlantic accent who revealed at an Oireachtas committee hearing last week that he was employed on the salary cap of €500,000 but that he had himself subsequently gifted a further 15% back to the Exchequer meaning he now earns €425,000. Contrast that with Zambian-born CEO of Bank of Ireland Richie Boucher whose basic salary is €640,000 and who apparently either hasn’t been asked to take a paycut or if he has, the accounts would suggest he’s said “no”
Next is IBRC, the name of the organization which merged Anglo Irish Bank with Irish Nationwide Building Society. Australian Mike Aynsley had a package last year worth €866,000 and will this year be paid €500,000 plus allowances of €38,000 and a 25% pension. Compare IBRC with NAMA and on practically every level, NAMA has a bigger and tougher job than IBRC and is doing that job at a cost of 33% less than IBRC. Yes, IBRC may have to deal with the Quinn family but NAMA has to deal with Paddy McKillen, Johnny Ronan and Treasury. It should be made clear that there haven’t been allegations of malfeasance against Messrs McKillen and Ronan but both have proved to be difficult and litigious individuals, and the Treasury story is far from finished – and Paddy McKillen has launched another appeal against a decision in Britain involving NAMA. And yet Brendan McDonagh is paid €430,000 and has waived 15% of his salary so that in 2012 he will earn €365,500. And it was recently revealed that pension costs at NAMA are an average of 5% of salary.
And at IBRC we know from the Sinn Fein finance spokesperson’s parliamentary questions this week that IBRC has rejected Minister Noonan’s attempt to secure paycuts at the top level of that bank. We don’t yet know what salary attaches to IBRC’s British Chief Financial Officer Jim Bradley but the betting is that he is one of the five IBRC staff on €400,000-499,999 as revealed by Minister Noonan. Ditto for IBRC’s “special projects” specialist who pursues the Quinns, Briton Richard Woodhouse. However there has been one pay cut at IBRC and that has been to the chairman’s salary. Chairman Alan Dukes has taken a paycut of €100,000 to his €250,000 annual fees and he may have offered a subsequent waiver in June 2012.
Back over at NAMA’s parent organization, its CEO John C Corrigan has taken a 15% cut to his €480,000 salary. The days of the CEO of the NTMA being paid €1m are long gone and John will get paid a gross salary of €408,000 in 2012.
Many people will probably look at the reduced salaries of the Irish working in the banking sector and say that they are still too high. But there has been sacrifice there which has not been mirrored by non-Irish banking personnel. And they might say, why should they offer pay-cuts, they’re not Irish and not expected to put on the “Green Jersey” but if the evidence is that Irish peers will accept paycuts in a sector which is largely controlled by Minister Noonan, then maybe we should be seeking personnel changes.