Ms Francesca McDonagh:

At the moment there are restrictions around variable pay based on performance, which is not allowed at any level. We have over 10,000 employees and there is no opportunity to differentiate financially between a fantastic colleague who goes the extra mile for a customer and a person who does not meet the standard. There are other ways to differentiate and we do that by recognising, promoting and developing staff but there is no way to vary pay under the current restrictions. If there is a variable payment there would be a large tax associated with it. In the Minister's letter there is also a restriction on a total payment of €500,000 for any individual. When I refer to normalisation of pay, I am thinking of being more aligned with other banks in Ireland. At the moment the restrictions only apply to Irish banks, including Bank of Ireland, but other banks and financial services companies, along with all other private industry companies, are not restricted in the same way. We know the historical reasons for this, of which I am mindful, but we are encouraging normalisation at this moment in time. This is not just about a couple of senior people at the top of the organisation - variable pay can help drive accountability and reward the right behaviours and performance that are customer-focused at all levels of the organisation, including those who work in a branch. Second, it is very difficult to compete for highly specialised roles and such people can be offered much larger packages by non-Irish banks in Ireland. We are increasingly competing with "Silicon Docks" for people with very strong IT or transformation skills. Third, it is making Irish banks unable to compete on a level footing with other banks and other sectors in Ireland. This is a political matter and a matter for the Government. We were asked for input into the third-party review and we shared that perspective with it. We also gave detailed information of where we are seeing salaries and variable pay packages being offered which provide benefits that we are simply not able to provide. As a result of Brexit, we are seeing it increase quite significantly and it can represent a risk to Irish banks in their ability to retain and develop our talent.