Latest news with #Government-imposed
Irish Independent
22-06-2025
- Business
- Irish Independent
AIB likely to quadruple chief executive Colin Hunt's pay package to €2m after government exit
The sale of the State's final 2.06pc stake has freed the bank from the Government-imposed salary cap on banker pay. It is likely that AIB will look to bump up Hunt's pay – and also add in a equivalent share allowance to at least match that of Bank of Ireland CEO Myles O'Grady. O'Grady is paid a basic rate of €950,000 before his pension or bonus at Bank of Ireland, which divested from State ownership in 2022. That compares to the €500,000 basic wage that his AIB counterpart receives. After pension and bonuses are included, Hunt is currently paid just over €600,000 a year. 'To be fair, a salary of €500,000 for the CEO of the largest bank in Ireland is not competitive. It's well below market rate,' said banking analyst John Cronin of SeaPoint Insights. 'Bank of Ireland pays Myles O'Grady €950k and it pays CFO Mark Spain €600k. So I would say that the CEO and CFO of AIB will go to those levels at least pretty quickly. It's hard for the general public to get their heads around pay packages above €500k "They'll probably keep CEO pay just below €1m. It'd be a surprise if they didn't match Bank of Ireland, and they might go around €25,000 more,' he said. Now that the Government has sold its stake and the salary cap at the bank has been removed, industry sources believe AIB is also likely to add a lucrative fixed share allowance to Hunt's package – effectively matching O'Grady's deal. Bank of Ireland's top executives currently get a fixed share allowance of 50pc of salary, introduced after the State sold its final shares in the bank in 2022. That fixed share allowance is expected to rise to 100pc next year. 'It's hard for the general public to get their heads around pay packages above five hundred grand and why a CEO has to be paid a million,' admitted another industry source, adding that Hunt was seen as unlikely to seek work with banks in London or elsewhere. 'I'd think he would probably attach a huge amount of value to living here, from a family point of view. He's also in the middle of every significant macroeconomic debate in Ireland because of his position – and I wouldn't underestimate the value he attaches to that. 'But if you want to hang on to that management team and keep them together, then you have to compete in the marketplace. And now they have the freedom to compete. "It would be kind of dysfunctional to have a banking market where one big bank can pay double what the other big bank pays, when they're more or less doing the exact same thing,' said the source. Cronin feels the pay cap should never have been introduced. 'I get that it worked politically. But you have to pay people properly to do a job. They could move to another smaller bank and get paid twice the amount and more. The danger is you get runaway cost-inflation across the sector "There is no doubt shareholders saw an ongoing retention risk in relation to the management team and they were not happy about that.' Cronin said bankers are disappointed that Finance Minister Paschal Donohoe did not remove the ban on variable performance-related bonuses above €20,000. 'My own view is that he should, but I can totally understand why he didn't. The danger is you get runaway cost-inflation across the sector. 'But the problem is that it creates cynicism within the sector, where people say that it's OK for the top guys to get paid properly, but not everyone else. And it can drive fixed-pay inflation, which is less ideal from a cost flexibility standpoint.'
Irish Times
06-05-2025
- Business
- Irish Times
Trade war threat spooks shoppers
April's trade war threat spooked shoppers last month, but there are no indications yet that Irish people plan to rein in spending, a survey indicates. The news comes as a Government report shows that consumers were key to recovery from Covid-19 lockdowns. Global uncertainty sparked by US president Donald Trump 's pledge early in the month to tariff imports led to consumer sentiment here plunging, according to the Irish League of Credit Unions (ILCU). The organisation said on Tuesday that fears that a global trade war would lead to 'markedly weaker economic conditions' at home left confidence at its weakest in two years. READ MORE 'Irish consumers are now altogether more nervous and negative about the economic and financial environment than they were at the start of this year,' said the league in a statement. Irish people are more nervous and negative about the economic and financial environment than at the start of the year, it added. 100 days of Trump: 'It's like The Karate Kid, tax on, tax off, tariffs on, tariffs off' Listen | 42:49 Consumers in other countries share Irish shoppers' nervousness as surveys worldwide last month found similar sentiments, the statement noted. However, the survey carried out by the credit union league with Core Research , most people are not planning to rein in spending yet. Irish League of Credit Unions chief executive David Malone noted that its sentiment survey highlighted that despite 'current economic uncertainty, the majority of Irish consumers are now planning to spend on home improvements'. Meanwhile, a Department of Finance report shows that a rebound in consumer spending aided the economy in recovering from Government-imposed Covid curbs. Families accumulated cash as lockdowns forced them to stay indoors, cutting their opportunity to spend, states the report, The Irish Economy – five years on from the pandemic. 'Once restrictions were formally lifted, healthy balance sheets and the release of pent-up demand triggered a large and fairly rapid rebound in consumer spending,' it notes. The report, due for release on Tuesday, states that this rebound in spending was key to the economy's recovery from Government restraints. However, Irish people ended up paying far more for goods and services after Covid than before, the civil servants in the department's economics division acknowledge. [ Irish consumers nervous about Trump policy shift as sentiment remains subdued Opens in new window ] Several shocks, including Russia's invasion of Ukraine, which came as the Government rolled back the last of its restrictions, drove the most severe bout of inflation in decades. Prices are now about 20 per cent higher than they were before the government locked the State down five years ago, the research indicates. The department claims that businesses have created about 400,000 jobs here over the last five years, keeping unemployment at 5 per cent since 2022. 'Government supports helped maintain the link between employers and employees and prevented long-term 'scarring' effects on the labour market,' the department maintains.
Telegraph
18-03-2025
- Business
- Telegraph
Miliband accused by Cabinet colleague of ‘false trade-offs' in airport row
Ed Miliband has been challenged by a Cabinet colleague over 'false trade-offs' in the ongoing political row over airport expansion. Heidi Alexander, the Transport Secretary, said she would 'never accept' that building new runways was in competition with meeting environmental targets set by the Energy Secretary. Ms Alexander's remarks will fuel speculation that a third airport will receive Labour's blessing for its expansion plans. Earlier this year, the Government backed Gatwick and Heathrow's plans to build extra runways, while a deadline for Ms Alexander to give or withhold permission for Luton Airport to expand is due on April 3. Prioritising economic growth over environmental protections has previously created tensions between the Treasury and Mr Miliband. Speaking to senior executives at the AirportsUK trade association's annual dinner on Tuesday, Ms Alexander said: 'I will never accept the false trade-off that pits growing aviation against protecting our environment. I honestly believe we can and must do both. 'That underpinned my announcement a few weeks ago on Gatwick, where I set a clear path for expansion if certain conditions are met. 'And, of course, I'll be making an announcement on Luton very shortly.' Gatwick is expected to receive permission to bring its emergency standby runway into routine use if it meets Government-imposed targets on the proportion of passengers who travel there by public transport, and on noise mitigation measures. In remarks calculated to soothe the Mr Miliband's feelings, she added: 'Now, my job has to be balancing the economic benefits of expansion with our social and environmental commitments.' Ms Alexander said that some major airports are 'bursting at the seams' because capacity issues in the South East were 'long-ignored' and 'too many people stuck their heads in the sand'. Last year, Heathrow handled a record-breaking 83.9 million passengers, as well as recording seven million travellers passing through the airport during Christmas and New Year. Luton Airport's proposal would involve expanding the single-runway airport's current terminal building and constructing a second terminal. It would also require extending the Dart rail link to the second terminal, new taxiways – which connect the runway to terminals, hangars and other facilities – and parking facilities. Mr Miliband has previously argued against expanding airports, claiming it would breach the green targets he has set. Although he described the suggestion that he would resign after the Government backed Heathrow's third runway as 'ridiculous', the Energy Secretary is well known to prefer environmental targets over growth. In January, he promised that the UK will slash its climate emissions by more than 60 per cent by 2035, in a move seen as risking direct conflict with the plans of Rachel Reeves, the Chancellor, to drive economic growth through approving airport expansion. Mr Miliband told the UN that the UK will cut its emissions, including from aviation, from 393m tonnes of CO2 equivalent in 2023 to 155m tonnes in 2035 – a 61 per cent reduction. Meanwhile, Ms Reeves has claimed airport expansion will not clash with Britain's net-zero goals, arguing that so-called sustainable aviation fuels, made from sources such as recycled vegetable oil, will help to cut aviation's carbon footprint.
