ALLIED IRISH Banks has asked the Department of Finance to allow its new chief executive to join any future incentive pay plan agreed for senior bankers by the Government linked to a recovery of bank bailout funds for the State.
The bank, which is 99.8 per cent owned by the State, submitted a pay proposal to the department yesterday for the role of chief executive, a position it hopes to fill in the coming weeks.
The bank, which, with its new subsidiary EBS, has taken €20.7 billion from the State, has agreed to abide by the Government’s pay cap for bankers by seeking to pay the candidate the €500,000 limit.
A spokesman for the department confirmed that the bank had submitted a proposal for the pay arrangements for the candidate.
“We have received an application from AIB but we cannot say anything more about it until it has been fully considered,” he said.
An AIB spokesman said that a recommendation on the chief executive’s pay had been submitted to the department for consideration.
The shortlist has been narrowed to two candidates – David Duffy, a former executive at Dutch bank ING Baring, and Brendan McDonagh, former head of HSBC’s North American business.
The bank’s preferred candidate is Mr Duffy whose immediate availability to take up the role is believed to have played a factor in his selection by the lender.
However, Mr McDonagh, who ran HSBC’s banking and consumer finance business in the US and Canada, is said to be still in the running for the top job should Mr Duffy withdraw.
Mr McDonagh is familiar with the workings of State-related agencies as a member of the advisory committee of the National Treasury Management Agency.
The most senior executive role at AIB is being filled by the bank’s chairman David Hodgkinson, a former HSBC executive. He is willing to stay on as a non-executive chairman for a year once the role of chief executive is filled.
That job has been vacant since managing director Colm Doherty departed almost a year ago.
Educated in Trinity College Dublin, Mr Duffy runs his own business consultancy in Singapore. He has also previously worked with Standard Bank.
