Lender adopts ‘gradual normalisation’ approach to bonus pay which is set at half of maximum limit under new rules
Banking Bank of Ireland sparks staff anger as bonuses fail to match record profits
In the lead-up to the results, Myles O’Grady, the chief executive, had pledged that the bank had “no desire to hoard” excess capital on the group’s balance sheet, signalling a bonanza for shareholders. The bank had also announced plans to introduce a new profit-sharing scheme for staff following a change in government rules around banker pay – the first time since the crash that bonus payments were on the table.
In a note to all staff, seen by the Business Post, Matt Elliott, Bank of Ireland’s chief people officer, said “exceptional” performers in the bank will get a 5 per cent bonus, while those with a “strong” performance rating will get 4 per cent and those marked “inconsistent” will get 2 per cent.Under the government’s rule changes around banker pay, they could have paid bonuses worth up to 10 per cent of an annual salary, subject to a cap of €20,000.
The problem for Bank of Ireland is that the record profits it earned last year have been flagged for months, which had heightened expectations inside the bank that maximum bonus payments were coming. The FSU on Thursday wrote to its members in the bank to invite them to a series of meetings next week to discuss the bonuses and the matrix that it used to calculate them.
Banking analysts at Davy and Goodbody stockbrokers believe AIB will report operating profits of around €2.7 billion on Wednesday, while they also expect the bank to follow Bank of Ireland’s lead and announce a ramp up in shareholder distributions. It’s expected the bank will return around €1.4 billion to investors through dividends and buybacks.
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