Dáil Éireann Debate, Tuesday - 26 March 2013
200. Deputy Pearse Doherty asked the Minister for Finance further to the publication of the Mercer report on pay and perks, the reason employees in banks have seen their salaries increase to levels which are amongst the highest in Europe, whilst employees in the public sector are being asked to accept pay cuts. [14908/13]
View answerThe Review of Remuneration and Practices and Frameworks at the covered institutions revealed that salaries for continuing employees has increased within a range of 4% to 6% due to pay increases awarded in 2009 and individual promotions across the remaining three covered institutions. No pay increases have been provided to the generality of the employees since that time and the Review states that bonuses are no longer payable at the covered institutions. It is not correct to say that the Review indicates that bankers salaries are among the highest in Europe. In fact, the Review opines that at senior executive level and above salaries are generally behind the market as compared to quoted Irish companies and the Mercer European Financial Services survey and significantly behind when incentives are taken into account.
The Government has taken the decision that with the remaining Covered Institutions still incurring losses it was an inescapable conclusion that the cost base of the institutions needs to be reduced further. This is essential if they are to return to profitability, be in a position to support the economy and repay the State’s investment through a return to private ownership.
In terms of next steps, I, on behalf of the Government, have directed the banks to come up with plans as to how they intend to address this issue in a manner that can help meet the State's objectives. I expect the value of those plans to mean a saving of 6% - 10% of total remuneration costs, through reductions in payroll and pension benefits, new working arrangements and structures that deliver efficiency gains.
