Written answers

Thursday, 23 June 2016

Department of Finance

Banking Sector Remuneration

Photo of Maurice QuinlivanMaurice Quinlivan (Limerick City, Sinn Fein)
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14. To ask the Minister for Finance why he supported the exorbitant salary of the chief executive of Bank of Ireland at the bank's recent annual general meeting, given the State's 14% shareholding in the bank; the rationale behind his position; and if he will enforce the policy of the Government pay cap at the bank's next annual general meeting. [17486/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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In the first instance, I wish to confirm for the Deputy that the Government policy on remuneration at the banks which has been in place since mid-2011 is fully enforced. The central plank of this policy, which is the pay cap of €500,000, was subject to pre-existing contractual rights. The current remuneration of Bank of Ireland's CEO, which has not been increased since that date, reflects this.

In relation to voting at the recent Annual General Court of Bank of Ireland, the Deputy will be aware of the strong set of financial results posted by the bank for 2015 which built on the progress made in 2014 when the bank returned to profitability. This progress directly benefits the State given its financial interest in Bank of Ireland and indeed some of its peers.

Against this positive backdrop, to take the significant and unusual step of voting against any of the proposed resolutions could have been perceived as an attempt by the State to interfere in a commercial entity, in which the State is a 14% minority shareholder. This could have done damage to Ireland in the eyes of the international investment community. Accordingly I deemed it appropriate to direct the ISIF to vote in favour of all resolutions, including the resolution relating to Directors' remuneration. I would also note that ISS Proxy Advisory Services - an expert independent firm which advises institutional shareholders on General Meeting voting matters - produced a recommendation that shareholders vote in favour of each of the resolutions. Overall, the vote in favour of this particular resolution represented more than 99% of all eligible votes.

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