Bankers’ Pay Curbs a ‘Real Concern,’ Allied Irish Says

(Bloomberg) -- Allied Irish Banks Plc said it may struggle to retain and lure new workers amid state-imposed pay limits, continuing to push the case for an easing of the curbs.

“The continuing restrictions on remuneration remains a real concern for institutional investors and proxy advisors,” Catherine Woods, deputy chair of the Dublin-based bank, told investors in Dublin on Wednesday. Chairman Richard Pym was unable to attend the annual meeting with shareholders.

The Irish government caps salaries at 500,000 euros ($561,000) and banned bonuses at AIB, Bank of Ireland Group Plc and Permanent TSB Group Holdings Plc as part of state bailouts during the financial crisis. Even if bonuses are reinstated, payments over 20,000 euros would face an 89 percent super tax.

The government has hired Korn/Ferry International to review the caps. While that review may recommend easing the constraints, Finance Minister Paschal Donohoe told Bloomberg News in January he had no plans to ease the restrictions.

Woods said it would wait until the report is published before deciding whether to again seek to introduce some form of variable pay.

Addressing investors for the first time as CEO, Colin Hunt said the lender is trading in line with expectations so far this year, and the bank has had a “good” start to the year.

To contact the reporter on this story: Dara Doyle in Dublin at ddoyle1@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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