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Bank of Ireland may be able to breach state salary cap for new CEO
April 10, 2017 / 2:54 PM / in 3 months

Bank of Ireland may be able to breach state salary cap for new CEO

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DUBLIN (Reuters) - The Irish government may relax its cap on bankers' pay to allow Bank of Ireland BKIR.I to find a suitable new CEO, finance minister Michael Noonan said on Monday.

Bank of Ireland CEO Richie Boucher announced last month that he will retire before the end of the year after almost a decade in charge of the country's largest lender by assets, which has begun the search for a replacement.

Since Boucher was appointed CEO in February 2009, shortly after all Irish-owned lenders sought a state bailout, the government has imposed a cap of 500,000 euros (426,150 pounds) on annual salaries at rescued banks.

In a prospectus issued last week in relation to a proposed share consolidation, Bank of Ireland said the 500,000 euro pay cap "places it at an increasing competitive disadvantage in seeking to retain and attract staff, particularly those with certain skill sets and in international locations."

Noonan said that as the government held only a 14 percent stake in Bank of Ireland, it might be more flexible over pay than it has been with the two other lenders it bailed out, which are still majority state-owned.

"In the case of Richie Boucher's replacement, we'll see who the replacement is but Richie's salary was never bound by the cap and we are only a 14 percent investor in the Bank of Ireland," Noonan told reporters.

"So if they appoint someone significant from outside, I think the parameters for negotiating pay will be somewhere in line with Richie Boucher's ... It will depend on who they find. It's not decided yet."

Boucher's gross annual salary has remained at 690,000 euros throughout his tenure and his total compensation package was 958,000 euros last year.

Ireland's two other domestically-owned lenders, Allied Irish Banks (ALBK.I) and permanent tsb (IL0A.I), have changed chief executives since Ireland's banking crisis and had to adhere to the pay limits.

Asked if he should get rid of the limits altogether, Noonan said he would maintain the cap.

Reporting by Conor Humphries, writing by Padraic Halpin, editing by Susan Fenton

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