Bank of Ireland / pay: gross cap requires flexible replacement

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Updates from the Bank of Ireland

The loss of a CFO can be seen as unfortunate. Losing both looks like something to blame for the government. Francesca McDonagh, Managing Director of the Bank of Ireland, said Miles O’Grady Resignation As chief financial officer. She laments that her management team is unable to earn market wages due to the Irish salary cap for bankers. Looking at this European companion, she has points.

This means that O’Grady will switch to a non-financial corporation. His predecessor, Andrew Keating, blew up Irish building materials group CRH in 2019. Since then he has been the group’s chief financial officer at multiples of his previous salary.

McDonald’s can justify that the bank’s finance department (one-tenth of which still belongs to the state) is a graduate school for executives. Investors can easily say goodbye to the Bank of Ireland. Despite the great gathering Over the past year, shares have traded at 60% of their tangible book value.

Lex isn’t a fan of the compensation committee, which averages executive compensation, so everyone in the industry increases it steadily. But at first glance, price controls are also a bad idea in the open market.

The € 500,000 cap on executive compensation at Bank of Ireland makes Bank of Ireland executives less than a quarter of its peers at major banks such as Barclays, Commerzbank and NatWest. Nova in banks with undisclosed low wages will inevitably lead to loopholes in other sectors. Senior executives of brokers such as Allied Irish Banks and Goodbody acquired by Davy will join the Bank of Ireland family and receive higher compensation than equivalent executives at their parent bank.

The Irish tripartite coalition does not desperately seek to raise the salaries of the best bunkers whose predecessors have put their compatriots in great difficulty through reckless loans.

However, the Bank of Ireland reimbursed taxpayers in 2013 for the help given during the last financial crisis. It is time for the Irish government to consider replacing the crisis-inspired salary cap with more flexible rules. Incentive wages, limited by multiples of the average national income or labor income, are worth considering.

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