A replacement chief executive for Irish Nationwide Building Society, who had agreed to succeed Michael Fingleton, has told the board he will not now be taking up the position.
RTÉ News understands the executive told the society he would not be taking up the appointment because of the Government cap on executive pay at the society.
Over the weekend, there were calls for Mr Fingleton to resign following disclosures of his bonus and pension arrangements.
A well-placed source at Irish Nationwide said Mr Fingleton had sought to retire at the end of February 2008.
However, the board had asked him to remain for a further year, until a successor was appointed.
It now appears an executive, described as being 'international, but known in Ireland,' had agreed a package to take up the role.
A pay rate was agreed in the period after the State guarantee scheme for Irish financial institutions came into operation in September, protecting them from the international storm on the credit markets.
However, newly published guidelines for chief executive pay at banks and building societies covered by the Government's guarantee, capped what Irish Nationwide could offer at €360,000, leading the replacement to change his mind.
According to the source, Mr Fingleton's successor said he was no longer in a position to take up the role.
On RTÉ's Morning Ireland, Green Party's finance spokesman Senator Dan Boyle said the issue of high salaries to those in the financial sector raised questions about the governance of banks.
The Department of Finance said it would not be commenting.
However, it confirmed Minister for Finance Brian Lenihan would meet the society this week to discuss Mr Fingleton's pay, including a €1m bonus paid to him in the weeks after the State guarantee and his multi-million euro pension fund.
