Sinn Féin is to ask the Revenue Commissioners to determine whether Bank of Ireland is allowed to top up the salaries of its chief executive and chief financial officer with bank shares worth up to 50% of their salaries.
The party's finance spokesman Pearse Doherty told RTÉ’s This Week programme that legislation which bans performance related bonuses, also contains a clause that rules out "any similar consideration".
"We will be looking for Revenue to make a determination on this, and we believe this is a workaround to try to get round this legislation," he said.
Last week, Bank of Ireland revealed details of a new share scheme, which would see its CEO Myles O’Grady and CFO Mark Spain awarded shares worth up to 50% of their salaries.
The scheme is not performance-related.
In a statement, Bank of Ireland said it is "fully compliant with all national and European rules and regulatory requirements in respect of remuneration, for all colleagues and at all levels of the group.
"This includes in respect of the changes announced this week which relate to fixed pay not variable pay.
"The basis for these changes is as detailed in our annual report. This will be put to shareholders at AGM later this year."
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In its annual report, the bank said the current bonus cap of €20,000 "significantly constrains the group's ability to structure and position senior role holders’ compensation packages competitively against the market.
"This causes significant risk to the group for the recruitment and retention of high calibre employees with appropriate skills and affects our ability to tie behaviours to an individual's compensation outcomes."
However, Mr Doherty said the allocation of shares to the CEO and CFO creates "a grey area which needs to be clarified".
"This isn’t regular pay, the legislation is very, very clear that irregular pay is captured by the excess [bank remuneration] charge and therefore there is still a grey area where we will need revenue to make a determination on it."
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In its annual report, the Bank of Ireland stated its desire to see the return of performance-related bonuses.
"The group continues to engage with the Department of Finance in that regard and if the remaining restrictions were removed, the group would consider, and seek shareholder approval to, update the remuneration policy, as appropriate, including the possible introduction of a market competitive variable pay scheme for executive directors".
The bank was bailed out with €4.7bn in taxpayers’ money in 2009, but the Government exited its stake in the bank late last year.
The Department of Finance said: "Following the removal of the €500k total compensation restriction at Bank of Ireland, who are a private commercial entity, there is no upper limit on executive compensation at the bank.
"This is now a matter for the board. The department notes that these awards are fixed in quantum and not performance related.
"AIB and PTSB continue to be bound by the €500k salary cap."
