Bank of Ireland loses its CEO to Credit Suisse
Bank of Ireland loses its CEO to Credit Suisse
(Bloomberg) -- Bank of Ireland Group Plc. said Chief Executive Officer Francesca McDonagh will leave her post in September, in an announcement coming just weeks after the company’s chief financial officer exited the lender.
McDonagh, who has held the position since 2017, will take over as Credit Suisse CEO for the EMEA region in October. A process to appoint a successor will now begin, Bank of Ireland said in a statement late Tuesday.
The CEO’s departure follows that of former CFO Myles O’Grady in March, a move which McDonagh publicly blamed on ongoing government restrictions on bankers’ pay in Ireland.
Annual pay is currently capped at 500,000 euros ($532,000) for Irish banks bailed out by the government during the financial crisis more than a decade ago, while bonuses are effectively banned. During McDonagh’s tenure the government began to sell down its stake in Bank of Ireland; it currently holds less than 5%.
Read more: Irish Government Extends Bank of Ireland Share Sale
Bank of Ireland secured an exemption from the pay cap when hiring McDonagh from HSBC in 2017, but the restriction is seen in Irish banking circles as a hindrance to attracting top talent.
“Until there is a pay structure that incentivizes senior staff to stay with the Bank of Ireland and the other lenders, these departures are likely to continue,” Diarmaid Sheridan, an analyst at Dublin-based securities firm Davy, said by phone.
Despite the existence of the pay cap, it may still be possible to find the right person to lead Bank of Ireland given that McDonagh earned 950,000 euros, according to John Cronin, an analyst at Goodbody. “While this is arguably light for a Top 2 Irish bank, a few local successor candidates known to us spring to mind,” Cronin said.
The Irish government is holding a review of the retail banking sector, which may include an assessment of banker paycaps and if it impacts staff retention.
Shares in Bank of Ireland fell as much as 8% in Dublin on Wednesday.
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