AIB’s decision to lift chief executive Colin Hunt’s potential pay to as much as €2.7 million marks the clearest signal yet that Irish banking pay is reverting to international norms.
After the State sold its remaining stake in the bank last year, fixed pay caps fell away, with Hunt’s salary rising from €500,000 to €795,000 and then to €1.35 million. AIB also plans fixed share awards of up to 100 per cent of salary, thus sidestepping the bonus cap (bonuses above €20,000 are taxed at 89 per cent) that still applies to Irish lenders.
A more than fourfold increase in one’s pay packet is attention-grabbing in any context, and especially so in Ireland, where bank CEOs have long operated under tight post-crisis restrictions.
If you zoom out, however, the numbers begin to look a little less exotic. A 2024 analysis by SUERF, a Europe-focused network of academics, regulators and banking professionals, found the average CEO of a European Stoxx 600 bank earned about €3.5 million in 2023. The largest cross-border lenders pay well into eight figures.
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Many UK peers do much better again, with the CEOs of major banks such as Barclays, Lloyds and NatWest all paid several multiples of Hunt’s prospective package.
As for US banking pay – well, let’s not go there.
How much is too much? Do the “pay for top talent” arguments hold up? Do top CEOs earn their keep? Research on chief executive pay is mixed in this regard but overall, pay generally rises with bank size and market valuation more than with straightforward profit measures.
Either way, bankers will argue this is less a leap into excess than a return to normality. Whether the public is comfortable with that normal is another question, but a fully private AIB no longer needs to lose sleep over that particular matter.
