Kenny admits banker pay caps are a constraint

Taoiseach Enda Kenny said Government-imposed banker pay caps are a "constraint," as the chief executive of state-owned AIB prepares to leave for a job in the UK.

David Duffy said this week he is resigning from AIB to take over as chief executive of National Australia Bank's Glasgow-based Clydesdale Bank.

“Wage caps are a constraint and obviously coming from where we’ve come from, that’s been a difficulty,” Mr Kenny said in an interview at the World Economic Forum in Davos.

“David Duffy proved his mettle.”

In 2013, Mr Duffy’s remuneration was €489,000, below a €500,000 pay cap for chiefs of rescued Irish banks. David Thorburn, his predecessor at Clydesdale, was paid about £1 million in the year to September 2014, according to the company’s annual report.

Mr Kenny declined to say if the Government would relax the pay cap in seeking a replacement for Mr Duffy.

Last year, Finance Minister Michael Noonan ruled out paying bonuses at AIB, which needed a €21 billion State bailout. The government last week picked Goldman Sachs to advise on how to recoup the cash injected into the bank.

“If a strong CEO candidate can be successfully identified in the short term, we believe that the Government could realistically sell its first stake in the group late in the third quarter or early in the fourth quarter,” said Philip O’Sullivan, an analyst i at Investec .

On the Central Bank’s proposals for mortgage limits, Mr Kenny said he agreed with the Department of Finance’s argument that they should be watered down.

He said he did not want future home loans restricted to “wealthy people and the children of wealthy people.”

Bloomberg