Banker Pay: A Return to Pre-Crisis Levels
After years of restrictions following the 2008 financial crisis, pay for top executives at Irish banks is rising sharply, returning to levels not seen since before the economic downturn. The lifting of pay caps, coupled with strong bank profits, is fueling this trend, sparking debate about fairness and accountability.
The History of Restraint
In the wake of Ireland’s financial crisis, public anger focused on the high compensation packages awarded to bankers, even as the state bailed out struggling institutions. This led to the introduction of pay caps, limiting executive pay to €500,000 and effectively banning bonuses. The aim was to prevent a repeat of the excessive risk-taking and reward structures that contributed to the crisis, which cost Irish taxpayers €64 billion in bailout funds.1
The Lifting of the Caps
These restrictions began to ease as banks regained financial stability. The pay cap was removed from Bank of Ireland in 2022 when the state no longer held a stake in the bank. In 2023, the cap was lifted at AIB and PTSB, even while the state retained a majority ownership in PTSB, to ensure a level playing field. A €20,000 cap on bonuses remains in place.
Recent Pay Increases
With the caps removed, executive compensation has increased significantly. Colin Hunt, CEO of AIB, saw his total package rise from €644,000 in 2023 to €793,000 in 2024, a 23% increase. His salary is projected to reach €1.35 million in 2025, more than doubling in two years. A modern ‘Fixed Share Allowance’ scheme could potentially increase his earnings to €2.7 million, depending on the bank’s performance.1
Eamon Crowley, CEO of PTSB, experienced a near 20% increase, with his total pay package rising to almost €713,000 in 2024, compared to just under €600,000 in 2023. Myles O’Grady, CEO of Bank of Ireland, earned approximately €1.86 million in 2024, with over €710,000 coming from a Fixed Share Allowance plan.
The Banks’ Justification
Banks argue that higher pay is necessary to attract and retain top talent in a competitive market. They face competition not only from other Irish financial institutions but also from multinational firms operating in Ireland and across Europe. The European Banking Authority has reported that investment bankers based in Ireland earned substantial sums – some exceeding €24 million annually – highlighting the potential earnings in the sector.1
Bank executives also contend that compensation packages extend beyond the CEO level, impacting pay across the entire organization. They believe that competitive salaries at all levels are crucial for attracting skilled professionals in areas like IT, security and data analytics.
Comparison to Other Sectors
Despite the recent increases, Irish bank CEOs are not the highest-paid executives in the country. CEOs of companies like CRH, Flutter Entertainment, and Kerry Group earn significantly more. For example, Jim Mintern of CRH could earn up to $13 million, and Peter Jackson of Flutter Entertainment earned the equivalent of €19.5 million in 2024.1
A Look Back: Celtic Tiger Era Pay
The current increases are drawing comparisons to the “Celtic Tiger” years, when bank executives enjoyed substantial compensation. Brian Goggin, former CEO of Bank of Ireland, earned almost €4 million in 2006. Eugene Sheehy, former CEO of AIB, earned over €2 million in 2007. Denis Casey, former CEO of Irish Life & Permanent, received over €1 million before the crash, and a total pay-off of almost €4.6 million upon his resignation in 2009. Michael Fingleton at Irish Nationwide received over €2 million in 2006, and even took a €1 million bonus in 2008 as the bank faced collapse. David Drumm at Anglo Irish Bank was paid as much as €3 million annually.1
The return to these levels of compensation is occurring as Irish banks report significant profits – a combined €3.6 billion in 2023 – and distribute billions to shareholders through dividends and share buybacks.
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