The Minister for Finance recently commissioned a report from Korn Ferry into remuneration in the domestic banking sector. Publication of the findings are awaited, with some speculation that it recommends a relaxation of the current regime, however, the junior Minister appears to be suggesting no change in policy.
Earlier in the summer, the Junior Minister for Finance with responsibility for Financial Services was very vocal in his resistance to any changes in the current remuneration policy at Irish banks. This regime includes a €500k pay cap and variable pay restrictions (and a bonus tax).
Mr D’Arcy in an interview with Bloomberg Asia TV touched on the topic again of bankers pay. Mr D’Arcy noted that he was of the view that Irish bankers were already paid well, being in the top percentile of people earning in the economy.
He believed a decision on bankers pay has already been made and when asked by the interviewer, he suggested he was not worried about an exodus of talent from the sector notwithstanding there have been a number of high profile departures at AIB and BOI in recent quarters plus a wider exodus at lower profile roles as well.
According to Goodbody Stockbrokers, "Any change in the regime was always going to be fraught with “political considerations” and the Central Bank’s ongoing culture review and the current mortgage tracker review probably need to be in the rear-view mirror as well before any progress is ultimately made on this issue. As such, the Junior Minister’s comments overnight are no real surprise."