Sorry Guys No Bonuses, Ireland’s Noonan Tells Top AIB BankersJoe Brennan and Donal Griffin
Irish Finance Minister Michael Noonan ruled out reintroducing bonuses for top bankers until performance improves.
Allied Irish Banks Plc, which needed a 21 billion-euro ($28.7 billion) taxpayer bailout, has approached the government about setting up an incentive plan to retain top executives before the government starts selling the lender, according to three people with knowledge of the matter. Allied Irish, based in Dublin, declined to comment.
“The answer is sorry guys, much better performance required before we’ll even consider” bonuses, Noonan, 70, said at Bloomberg’s headquarters in New York today. “If any executive wants to leave AIB, I’ll shake his hand and wish him fair passage as he leaves.”
The question of pay and bonuses is a lightning rod for public anger in Ireland toward bankers. Allied Irish’s bailout accounted for almost a third of Ireland’s 64 billion-euro rescue of its financial system after the worst real estate collapse in Western Europe.
“While we’re holding 99 percent of AIB, there’s no point in having those discussions with me,” Noonan said. “It makes no sense, and it’s not a demand that I’m prepared to deal with.”
After Bloomberg News reported the exploratory discussions between the bank and Finance Ministry officials, government and opposition lawmakers rushed to urge Noonan to resist the reintroduction of bonuses.
“The number one priority for AIB is to get itself off the backs of the Irish public after it was foisted on them when it collapsed,” said Ciaran Lynch, a lawmaker with junior government partner, the Labour Party, and chairman of the Irish parliament’s finance committee.
Noonan also said Bank of England Governor Mark Carney told him at Davos, Switzerland last week that Royal Bank of Scotland Group Plc unit Ulster Bank’s position in Ireland won’t change as part of a wider review to conclude next month.
Ulster Bank will continue to operate in Ireland and there’s “no news to come” as result of the review, Noonan said.