Noonan rules out bonuses for bankers until performance improves

Wednesday 29 January 2014 17.17
Noonan said he would shake the hand and wish 'fair passage' to any AIB executive who wanted to leave
Noonan said he would shake the hand and wish 'fair passage' to any AIB executive who wanted to leave

Minister for Finance Michael Noonan has ruled out the reintroduction of bonuses for top bankers until performance at their institutions improve.

Speaking to news agency Bloomberg in New York, Mr Noonan said that any kind of bonus scheme would not even be considered by him in the current climate.

“The answer is sorry guys, much better performance required before we’ll even consider [bonuses],” he said.

“If any executive wants to leave AIB, I’ll shake his hand and wish him fair passage as he leaves.”

Yesterday Bloomberg reported that AIB had approached Government to discuss setting up an incentive scheme for staff, which would likely have seen a share-based bonus being tied to bank performance.

As it stands, bonuses are prohibited in banks that were bailed out by the State, while executive pay is capped at €500,000 per year.

“While we’re holding 99% of AIB, there’s no point in having those discussions with me,” he said. “It makes no sense, and it’s not a demand that I’m prepared to deal with.”

Mr Noonan said there were banks in places like London that could offer better pay, but said there were many willing to take the place of those who leave in search of better remuneration.

During the interview the finance minister also said that banks had to deal with a number of issues – including bad debts - before the Government can look to divest its shareholdings in the institutions.

Meanwhile, he said that at the recent Davos conference, Bank of England’s Governor Mark Carney told him that Royal Bank of Scotland Group unit Ulster Bank’s position in Ireland would not change as part of a wider review to conclude next month.

He said the bank would continue to operate in Ireland there was “no news to come” as a result of the review.