AIB egm: Bank may need to break pay cap for new CEO, chairman argues

ALLIED IRISH Banks executive chairman David Hodgkinson said yesterday the bank may need to offer more than the Government’s €500,000 pay cap to find the right chief executive candidate.

He said it was appropriate to recruit an international chief executive as there was “very little in the way of people domestically who are not already involved in the banking problems of the past”.

The pay might be large but that was a reality to deal with if credible candidates were to be found outside Ireland as “top people can get jobs anywhere”.

“You are not necessarily going to get a full slate of candidates you might wish [for] to protect the Government’s €20 billion investment unless you are paying an appropriate level,” he said.

Mr Hodgkinson was speaking to shareholders, including Breda O’Byrne (above), at the extraordinary general meeting where they overwhelmingly approved a further State injection of about €12.7 billion, pushing Government ownership of the bank to 99.8 per cent.

He expressed “deep regret” to shareholders for the “real hardship” they had suffered.

“It has to be said yet again by people like me, so that we cannot forget, that serious mistakes were made in this bank which can’t be allowed to happen again,” he said.

Shareholders voiced opposition to the recapitalisation with some questioning whether the capital would help economic recovery.

People Before Profit TD Richard Boyd Barrett said the money was being used to “prop up zombie banks” and to repay bondholders in France and Germany. One shareholder said that AIB’s auditors KPMG had raised no warnings about reckless lending in its reports over nine years. Long-time dissident shareholder Niall Murphy said AIB was “no more a pillar of Irish banking than Sodom and Gomorrah were pillars of Judaism”.

The bank said it had paid professional fees of €6.25 million so far as part of its capital-raising efforts.