IBRC rejects Noonan request for high-earner pay cuts

THE FORMER Anglo Irish Bank, now known as Irish Bank Resolution Corporation, has rejected a request from Minister for Finance Michael Noonan that high earners at the bank take a pay cut.

Mr Noonan said the board of the State-owned bank recommended that “pay cuts should not be implemented at this time” in response to his request. In a written response to Fine Gael TD Eoghan Murphy, the Minister said IBRC’s board believed “further pay cuts would create a risk for the bank” in retaining staff and the successful recovery of assets on behalf of the State and the taxpayer.

“I have accepted the board’s position at this time. However, I have asked that the situation in relation to remuneration be kept under review,” said Mr Noonan.

“I have also conveyed my view that downward pressure is to be exerted in relation to the remuneration packages of any new staff recruited to the bank.”

A spokeswoman for the Department of Finance said bankers’ pay should be balanced between the capital and financial position of the bank and be sufficient to “attract, motivate and retain the type of experience and talent which is required to achieve the objectives and business plan”.

The Government is injecting €34.7 billion into IBRC to cover the €29.3 billion cost of Anglo and the €5.4 billion cost of Irish Nationwide Building Society, which the bank is also running down.

The Minister disclosed earlier this week that eight staff at IBRC are earning basic annual salaries of €300,000 or more and a further 16 are earning between €200,000 and €300,000 a year.

The bank has said Mike Aynsley, IBRC’s chief executive, received a remuneration package of €866,000 last year. Earlier this year, 15 staff earning more than €200,000 at the National Treasury Management Agency took a 15 per cent pay cut in response to a request from the Minister.

Staff costs at IBRC have fallen 48 per cent since the end of 2008, amounting to €107 million in 2011.

The Minister said the salaries of senior management at the former Anglo immediately after nationalisation in 2009 had been reduced by 20 per cent and total remuneration paid to the top 50 individuals at Anglo in 2009 had fallen by 15 per cent as of March 2012.