Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

It is a positive shift in stance from the Deputy, which I appreciate. Indicating his support for the principle of this up to a certain wage level is an honest admission of the challenges that are there at present.

We encountered two difficulties with regard to the €100,000 threshold in this regard. Bearing in mind that those who earn more than €100,000 in our banks currently account for roughly 10% of the total bank staff of these companies, it means that 90% earn below this. However, those earning €100,000 and more are still performing roles that matter to the performance of these banks. Some of these roles are those that will be subject to the additional conduct standards Deputy Doherty spoke about earlier. It is still the case that in the large number of other banks that are operating, growing and employing many people in this country those individuals will be able to get variable pay. There are individuals in these roles whom I want to see, subject to this legislation, stay in and contribute to the banks that employ a lot of people in Ireland and look after more than €200 billion of deposits. That is why picking a particular pay level is not something the Government decided to do. We would deal with all kinds of perverse incentives by adopting such an approach. Let us say somebody on €90,000 receives, for the sake of argument, a bonus of €15,000. This would mean the salary was €105,000 in a given year. If such people could not get an option for variable pay, they would earn less by being promoted to a role in which they would earn €101,000. These are the real-life difficulties that can play out in very large companies. If we pick a salary level under which variable pay would not be available, it could weaken the incentive or attraction of the roles at that level and above.

This is not the world that any of us are in. Nobody here earns bonuses. I am very much aware of the hours that everybody in the Chamber puts into performing their roles for their salaries. In many other large employers variable pay is a standard way in which people are paid. Pegging this at a certain salary level would create counter-productive consequences for something I believe is worth achieving. This is to ensure the three banks we have left in this country are competitive versus the rest of the banks located here which employ an awful lot of people and can also pay bonuses. The Deputy's recognition of the role variable pay can play and his support for this principle is a welcome development.