SALARIES CONTROVERSY:THE MAN to whom Allied Irish Banks executive chairman David Hodgkinson previously reported at HSBC has said that the Irish banks must pay higher salaries to attract talented people to Ireland.
Michael Geoghegan, who until last March was chief executive of HSBC, where Mr Hodgkinson was chief operating officer, said banks had to pay up for “market” rates.
“You won’t get the talent to come to Ireland unless you are prepared to pay,” said Mr Geoghegan, speaking before a business alumni event at Trinity College Dublin.
Mr Geoghegan said that the Taoiseach, Government ministers and executives at the National Asset Management Agency should be paid higher rates to secure the best return for the Irish taxpayer.
“I would argue that your Taoiseach isnt paid anything like what he should be paid for his vision, his skills. You have the same issues with Nama – if you want the type of talent that you want to turn around a €30 billion portfolio you need the best people,” he said.
Mr Geoghegan’s views support Mr Hodgkinson’s position earlier this year that AIB should be able to pay above the Government’s cap of €500,000 to attract the right person as chief executive.
One candidate for the job is Brendan McDonagh, who ran HSBC’s North American business when Mr Geoghegan ran the bank.
“We ran a bank very conservatively,” he said. “David and Brendan would carry that same ethos into any job that they do.”
Mr Geoghegan, whose family are Irish and whose father was a professor at UCD, said Ireland must continue reforming its public finances and banking system.
“Ireland must stick to what it is doing – be transparent and open and the markets will reward you; they are rewarding you,” he said.
The Government should seek further budgetary savings beyond the €3.6 billion target if that didn’t create social problems, he said, but warned that EU structures also must be reformed.
“Far too much of the EU is decided upon by people in Brussels that aren’t elected, by people who have an aspiration of power well beyond their own borders.”
