Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The issue of bankers' pay and bonuses is a fraught one, both in Ireland and other jurisdictions. It is only two weeks since the Capital Requirements, or CRD IV, Directive from Europe was under discussion. The UK authorities were pushing in the opposite direction to allow much higher bonuses than would prevail in any other jurisdiction. Around the same time there was a referendum in Switzerland which sought to draw up new rules for bankers' pay and bonuses.

We have agreed with the covered institutions caps for chief executives and chairpersons. We have also agreed that no bonuses of any sort will be paid. Internationally, bonuses are much higher than basic salaries in the banking profession.

It is an issue that arises periodically. It came up here extensively before Christmas with questions from many Deputies across the House but, in my view, it generated more heat than light. I wanted to act but on objective criteria, so I engaged Mercer to do an objective study. Mercer came up with the answers to what the remuneration levels were across the banks. The IBRC was the outlier and they were significantly higher for reasons referred to in the Mercer report, but we had liquidated IBRC by the time the report was published. We are therefore left with the three covered institutions.

In respect of the Bank of Ireland and the gentleman whom the Deputy has named in the House, it should be remembered that the State is a minority shareholder in that bank. We have 15% of the shares. The investors saw fit to reward that individual and made it a condition of their investment that they would retain him as chief executive. We are minority shareholders.

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