The Government has today informed Allied Irish Banks (AIB) that it has no objection to the decision of the board of the bank to nominate Mr. David Duffy as its preferred unanimous choice for appointment as its Chief Executive Officer. In conveying this message the Minister for Finance, Mr. Michael Noonan T.D., said:
"I would like to thank David Duffy for accepting the position of AIB CEO and wish him well in the very important role of reinvigorating AIB. I note that he is the unanimous preferred choice of the board and brings a wealth of international banking experience from his work for a number of leading banks around the globe.
In the 31 March announcement of the restructuring of the Irish banking system, the Government set out that AIB would be a universal pillar bank working for the Irish economy by supporting its personal and business customers. Given the importance of this role and the very large amounts of capital invested by the Irish State in AIB, the Government was determined that the bank should recruit a CEO, in accordance with prevailing policy, of the highest calibre so as to yield the best possible return to the taxpayer.
Separately, I would like to thank David Hodgkinson for the leadership he has provided to AIB and am pleased that he is remaining on the board as non executive Chairman."
The Government is pleased that the remuneration policy set down by the previous Minister for Finance, Brian Lenihan, in capping the salaries of bank CEOs has been applied to this appointment.”
22 November 2011
Notes to Editors
Developments in relation to the salary cap on Senior Bank Executives
Since the Government has come into office there has been downward pressure on the salary cap as illustrated by the following developments:
Extracts for the Placing Agreement of December 2010 and the Minister’s letter of July 2011 consequent on further State investment in AIB
December 2010 – Placing Agreement
The total aggregate remuneration (excluding pension contributions) including without limitation annual base salary, bonuses and variable pay components of any person who is an employee or service provider or appointee or officer of any Group Company shall not, for a period of two years from the date hereof, exceed a maximum amount equal to the lower of (i) the amount recommended by CIROC in its report dated 27 February 2009 in any financial year or (ii) €500,000.
July 2011 – Minister’s Letter
Except with the prior consent of the NTMA (which consent may be by way of a consent applicable to a category of person or applicable only to a particular person or persons), the total aggregate remuneration (excluding pension contributions) including without limitation annual base salary, Employment Bonuses, Commission Payments and Fringe Benefits of any person who is an Employee or Service Provider or appointee or officer of any Group Comapny shall not, for a period of two years from the date hereof, exceed a maximum amount equal to the lower of (i) the amount recommended by the CIROC in its report to the Minister dated 27 February 2009 in any financial year and (ii) €500,000;
Terms and Conditions of Appointment
The appointment of AIB’s Chief Executive Officer is subject to the following terms:
·Fixed term contract of three years with an option to renew for up to a further three years by mutual agreement;
·Remuneration of €500,000 per annum in line with Government policy;
·There are no benefit-in-kind payments such as medical, club membership, car allowances, etc. (if any occur they will be provided for within the €500,000 cap);
·Six months notice period subject to a maximum compensation of six months’ salary;
·Employer Pension contribution of 15% along with an employee contribution of 5% to be paid in to the Bank’s Defined Contribution Pension Scheme;
·Vouched reasonable expenses for relocation costs to Ireland and provision of accommodation for a period of 3 months subject to board review