Bank of Ireland confirmed on Monday in its annual report that its chairman, Patrick Kennedy, plans to step down “later this year”, after 14 years on the board and six as chairman.
His time on the board is well beyond the nine years that is considered best practice under the UK corporate governance code, which is recognised by the Irish Stock Exchange as the gold standard.
Still, so-called proxy advisory firms to big investors have avoided raising objections to Kennedy’s extended stay on the basis that the bank has undergone significant changes at executive level and has been active on the acquisitions front in recent years. The chairman has also enjoyed strong support at annual general meeting re-election votes.
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Global executive search firms Egon Zehnder and Spencer Stuart were appointed last year to help find a successor to Kennedy, a former chief executive of Paddy Power (now part of Flutter Entertainment).
However, Bank of Ireland’s latest annual report flags that the fee for the job hasn’t moved since it was reduced to €394,000 in 2009, when the bank was the subject of a bailout, and is “towards the lower quartile of fees paid for equivalent roles in the market”.
It said that the remuneration committee has “agreed that an increase in the all-inclusive fees for the chairman role is required to attract a candidate with the appropriate experience and skills, and to reflect the time commitment required”. We await the outcome of the search.
A move by the bank to reintroduce staff bonuses last year for the first time since 2008 — albeit capped at a €20,000 limit imposed by the Government — saw group chief executive Myles O’Grady, and his chief financial officer Mark Spain, each receive a €16,500 award under a new profit-share scheme, bringing their total remuneration to €1.07 million and €641,000, respectively.
Remuneration committee chairman Ian Buchanan also hinted that the two executive directors may look forward to pay increases on foot of a review to be undertaken in 2024 and brought to next year’s annual general meeting for a vote. Engagement with some big shareholders drew the view from several “that executive director pay is positioned below benchmarks and that this gap should be reviewed, with consideration also given to strengthening alignment of interests between the executive directors and shareholders”, he said.
As things stand, the chief executive and chief financial officer will receive a fixed shares award equating to 25 per cent of their basic salary this year, rising to 50 per cent from 2025. Any increase in basic pay would deliver a knock-on boost to stock awards.
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