Fianna Fáil Finance Spokesperson Michael McGrath has said the government must ensure that ordinary bank employees are not scapegoated in the drive to reduce payroll costs following the publication today of the Mercer review of remuneration practices at the covered institutions.
Deputy McGrath stated, “The 125 page report is very detailed and requires careful consideration. In responding to the report, the government has directed the banks to come up with plans to deliver savings of 6% – 10% of total remuneration costs but has not directed the banks to address executive pay in the first instance. I am concerned that ordinary bank employees will now be targeted on the back of this report.
“When comparing executive pay at the banks to pay levels in banks abroad and similarly-sized Irish companies, you have to bear in mind the enormous level of support extended to the Irish banks by our citizens. The basic fact is these banks owe their very existence to that extraordinary support. In a small and shrinking banking sector, we still have over 1,500 bank executives earning basic salaries of over €100,000. We have almost 170 retired bank executives drawing pensions over €100,000. This is where the banks must start as they work to reduce their cost base.
“For some time, I have been highlighting the exorbitant pay being earned at the top levels within IBRC (now in Special Liquidation) and I believe this has been vindicated by today’s report. It is also interesting to note that the Minister for Finance is willing to issue a direction to the banks in relation to their cost base but has been consistently unwilling to intervene as banks continue to increase their variable mortgage rates. Once again, the government has been inconsistent on the question of when it is willing to intervene with the running of the banks.
“We need a banking system where employees are rewarded appropriately and where the culture of excessive risk taking is over for good. Fianna Fáil will study today’s report in detail and will question the Minister on the government’s response over the period ahead.”