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'There shouldn't be bonuses for bankers': Taoiseach takes stance on bankers' pay

Varadkar’s comments come after Finance Minister Paschal Donohoe said the government will establish a review to examine bankers’ pay.

Image: Thierry Monasse

TAOISEACH LEO VARADKAR has said bonuses should not be reintroduced for bankers after bank officials suggested that pay restrictions should be relaxed in order to retain staff.

Government restrictions cap bankers’ pay at €500,000 per annum with no bonus.

Management at AIB had proposed introducing a package worth up to 100% of salary in an effort to allay the risk of executives leaving the bank for higher paying jobs elsewhere.

The fear has been heightened as Brexit approaches with international banks, who would not be subject to the restrictions, considering relocating to Dublin.

Varadkar firmly dismissed the proposal today. “The government’s position is that there shouldn’t be bonuses for bankers. We currently, as you know, have a tax in place on such bonuses,” he said.

The most appropriate way, I believe, to reward workers in the private sector is through things like share options, for example. I wouldn’t like to see us going back to bonuses.

Varadkar noted that there is a distinction between banks that the government controls, because it is a shareholder, and those that it doesn’t.

Closing Day Of The World Economic Forum (WEF) 2018 Minister for Finance, Paschal Donohoe. Source: Simon Dawson

Yesterday Finance Minister Paschal Donohoe said the remuneration restrictions put in place in the aftermath of the banking crisis will not be removed.

However he revealed that a review will be established to examine bankers’ pay. The review is expected to wrap up later this year.

The announcement of the review sparked resistance from the opposition. “I fear today’s announcement marks the beginning of a return to the days of runaway salaries and bonuses at the banks,” Sinn Féin’s finance spokesman Pearse Doherty said.

Given the behaviour in recent times of the banks including the ongoing tracker scandal and rip off interest rates that is very worrying.

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The minister said he will vote against the AIB pay proposal at the bank’s AGM next week. As the State owns 71% of the bank that vote will scupper the pay plan.

“These remuneration restrictions date back nearly a decade and affect in the region of 23,000 Irish bank staff,” Donohoe said.

Management at Bank of Ireland has also suggested that it may seek a loosening of the pay restrictions.

The State’s 14% stake in the bank wouldn’t be sufficient to block any bonus plans.

With reporting by Christina Finn

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