Banking Sector Remuneration

Dáil Éireann Debate, Wednesday - 1 May 2013

Wednesday, 1 May 2013

Questions (101)

Michael Lowry

Question:

101. Deputy Michael Lowry asked the Minister for Finance if he will, in view of the information that has come to light in the past week, take definitive steps to cap the salaries being received by senior officials in the banks that have received State capitalisation; if he will provide a guarantee that these payments will be clamped down on; his views on whether the current salaries and payments being received are fair in view of the funds provided to these banks by the Irish taxpayer; the reason he did not exercise his vote against approving such a payment in an individual case in the past week; and if he will make a statement on the matter. [20821/13]

Written answers

Minister for Finance

The present policy on remuneration at the covered institutions dictates that no individual may receive annual aggregate remuneration (excluding pension contributions) exceeding €500,000 unless specifically authorised. This overarching policy is now supplemented by the inescapable conclusion arising out of the recently published Review of Remuneration Practices and Frameworks at the covered institutions, conducted by Mercer, that as the remaining institutions still incur losses their respective cost bases need 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. On behalf of the Government, I 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.

It was in this context that I decided to abstain on the resolution referred to by the Deputy. I expect that any measures proposed will require sacrifices at all employee levels and strong leadership to be exercised by the banks in delivering in a timely manner.