Matthew Elderfield and bankers salaries
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He has a point. Pay caps are ridiculous ideas. Does anyone believe that the top bankers are only on 500k as is. Mike Aynsley at Anglo made roughly €1m last year. If you are going to attract outside expertise you have to compete with the big financial centres. London and New York both looked at pay caps and quickly backed down. By all means restructure pay to reflect long term performance targets but pay caps are crude instruments that serve no real purpose.
It's the same in the semi state sector. Pay caps are a rubbish idea. Pay should be benchmarked internationally with a large section of it performance based. For example, the head of the BAA which handles multiples of passenger numbers that Irish airports handles earned about 900k last year. Declan Collier made about 650k. That is way out of whack. Just like 250k is probably not enough to attract someone from abroad to take on the job if we want to attract outside talent.
dereko1969
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I agree with him, the cap is populist nonsense and will not get value for money for the taxpayers who are the virtual owners of these banks.
there needs to be a long term based bonus scheme for the CEOs and others, this will be the difference to the last time.
there needs to be a long term based bonus scheme for the CEOs and others, this will be the difference to the last time.
The absence of a pay cap in the past didn't ensure the presence of the required expertise and judgement. If anything, the high salaries seemed to confer delusions of adequacy among those who were getting them.
The notion that the abolition of pay ceilings is now required to ensure the required expertise might equally be regarded as populist nonsense among a certain minority whose true worth has perhaps been exposed and for whom the new order represents and unpalatable reality.
The international norms argument is bogus. We're a small open economy with a small banking infrastructure. Should we necessarily be competing for talent with top international concerns? It's trying to muscle it with the heavyweights that has got us where we are.
The argument for the abolition of pay ceilings could be applied to any part of State supported services. anyone sought to increase the salary of public servants, there would be uproar. Yet again, though, the financial world seems to think they should be regarded as "special" and that exceptions should be made for them.
Unbelievable. For them, humility is something that occurs in the summer.
The notion that the abolition of pay ceilings is now required to ensure the required expertise might equally be regarded as populist nonsense among a certain minority whose true worth has perhaps been exposed and for whom the new order represents and unpalatable reality.
The international norms argument is bogus. We're a small open economy with a small banking infrastructure. Should we necessarily be competing for talent with top international concerns? It's trying to muscle it with the heavyweights that has got us where we are.
The argument for the abolition of pay ceilings could be applied to any part of State supported services. anyone sought to increase the salary of public servants, there would be uproar. Yet again, though, the financial world seems to think they should be regarded as "special" and that exceptions should be made for them.
Unbelievable. For them, humility is something that occurs in the summer.
Irish banks like the ciliv service and the wider semi state sector have always promoted from within. And they always paid themselves huge salaries because they claimed that they could get this money elsewhere but that was rubbish. Foreign banks were never lining up to steal our executives. If we want to break this cosy cartel in Ireland, we have to attract people from the outside. For that we might have to pay more than the cap. I have no problem paying a Secretary General of the Department of Finance 1m a year if he can show that he is worth it.
The banks havent always recruited from within. David Went was an outsider as was Mike Soden. Its not as inbred as you might initially think.
However, I dont agree that the cap should be removed. At the end of the day we are a small country with what should be a small banking system. The notion that we need to compete salarywise with foreign institutions of far greater scale is daft.
At the end of the day, a CEO of a bank needs some knowledge of management practice, risk management, how to read company accounts and common sense. Every year the Smurfit School and other MBA providers in this state produce high caliber candidates for positions like these who would be willing to work within the salary cap.
Salary increase does not equal expertise increase as we have seen in recent years. We need hardworking intelligent people willing to work for an honest days pay and €500k is more than an honest salary.
However, I dont agree that the cap should be removed. At the end of the day we are a small country with what should be a small banking system. The notion that we need to compete salarywise with foreign institutions of far greater scale is daft.
At the end of the day, a CEO of a bank needs some knowledge of management practice, risk management, how to read company accounts and common sense. Every year the Smurfit School and other MBA providers in this state produce high caliber candidates for positions like these who would be willing to work within the salary cap.
Salary increase does not equal expertise increase as we have seen in recent years. We need hardworking intelligent people willing to work for an honest days pay and €500k is more than an honest salary.
2 CEO's from the last 20 years and they replaced both with internal people. Went also came from Ulster Bank so was part of the system. Soden was shafted very early. The top of Irish banking was completely inbred. Just like most boards in financial services companies.
I agree that 500k is a huge salary but if I want to hire someone and they are being offered 1m elsewhere, I should be able to match it if I really want the person. The problem in the past was that bankers just awarded themselves the salaries by claiming they were in demand. They weren't.
I have.
There have been some exceptional Secretaries General in recent years who have been more than happy to work for less than €250,000 (itself a huge amount of money). Paying anyone a million wouldn't make them more competent.
I don't see any reason why people with equivalent expertise in the area of banking should be paid disproprtionately higher amounts, particulalrly when they're being bankrolled by the State.
On principle I think paying someone to run what is effectively miniscule retail banks, doesn't warrant more than 500K, if it even warrants that. Now, if someone could get this or lower and then demonstably outperform targets to such a degree that a sustantial bonus would be justified retrospectively, then maybe it could be considered.
I don't have any issue with performance-related pay as such, and I'm not an advocate of caps per se, but all I do know is that no industry has been run so badly because of them. The so-called experts and top dollar exec's have ruined these institutions, heaped unbearable burdens on the taxpayers and destroyed shareholder value.
Banks, given their central importance to economies, should be treated differently from all other services industries, and be heavily regulated.
I don't have any issue with performance-related pay as such, and I'm not an advocate of caps per se, but all I do know is that no industry has been run so badly because of them. The so-called experts and top dollar exec's have ruined these institutions, heaped unbearable burdens on the taxpayers and destroyed shareholder value.
Banks, given their central importance to economies, should be treated differently from all other services industries, and be heavily regulated.
So your problem is with the salary? Well deal with that through taxation if you want. Why put a cap on what someone can earn or what a company can pay someone. What do you think you are achieving?
They were just two I knew off the top of my head, I'm sure there are more if investigated.
Soden wasnt shafted by the way, he fell victim to abusing internet usage policies that he himself implemented. His position was untenable after that.
In principle I am not totally against internal promotion, often internal candidates know where the skeletons are in the closet and are best placed to rectify problems. While its nice to get fresh blood and new ideas, hiring for these positions should be on merit not just based on being an outsider.
I'd agree that caps shouldn't be necessary but I believe that in the case of the banks, they are. The real tragedy is that a cap has become necessary to curb the excessive impulses of those in charge of the banks who seemed to genuinely believe they were worth it when the evidence has suggested the opposite.
If a private organisation wants to pay someone a million, good luck to them. But for as long as they depend on state assistance to prop them up when they should have gone wallop, I think it's reasonable to curb their behaviour, particularly in relation to pay.
The banks' current difficulties can't be related to their inability to pay more than €500,000 to their head honcho.
I was in BOI at the time. He was shafted. (Though he made it easy for them). Suggesting a merger with AIB at the time was the end of him. I have worked in banking for 15 years and I can't think of any outside CEO's or even Executives. I have heard stories about one Risk Committee on the Board of a major Irish Bank having to hire a consultant to explain VAR to them because none of them had banking experience.
We'll have to agree to disagree, I was also part of BOI at the time and the opinion of most of people I worked with at management and ordinary worker level was he had to go. Also Richie Boucher was hired from South Africa as far as I remember to executive level and subsequently the top job (I'm not endorsing him, I think they could have found better personally).
Anyway I wouldnt tarnish everyone in Irish banking with the same brush, there is a lot of intelligent hardworking people in banks who could do the job if given the chance. The problem is that they are not part of "golden circles" and hit glass ceilings career wise. The recruitment pool for these jobs needs to broadened.
Anyway I wouldnt tarnish everyone in Irish banking with the same brush, there is a lot of intelligent hardworking people in banks who could do the job if given the chance. The problem is that they are not part of "golden circles" and hit glass ceilings career wise. The recruitment pool for these jobs needs to broadened.
Complainer
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The cap will limit the cost to the State. These are effectively semi-state bodies at present, and are therefore under State control. The same rules should apply to them as other semi-state bodies, until they repay their debt to the State.
But it doesn't. As I already said, the head of Anglo is on a package of over €1m a year but we pretend he is only being paid 500k. Caps sound good in the media but that's all.