April 19, 2018 / 2:13 PM / a year ago

Allied Irish Banks' deferred share plan rejected by govt

LONDON, April 19 (Reuters) - Ireland’s government will use its majority shareholding to vote down Allied Irish Banks’ plans to introduce a deferred share plan for senior executives that it says would mitigate the heightened risk it currently faces in retaining key staff.

AIB last month proposed the plan that would be worth as much as 100 percent of salary and vest only if the state was able to sell more of its 71 percent holding. However it required formal approval from Finance Minister Paschal Donohoe.

Donohoe said on Thursday that the government would launch a review of banking remuneration policy and as a minority shareholder, also abstain in a Bank of Ireland vote on Friday seeking approval to engage with shareholders on a future incentive scheme.

Dublin capped executive pay and banned bonuses during its banking crisis a decade ago. Donohoe said he acknowledged that in light of firms moving to Ireland as a result of Brexit, remuneration restrictions could act as a barrier to the retention of staff in some areas. (Reporting by Padraic Halpin, editing by Andy BRuce)

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