The Department of Finance says it has no plans to change the remuneration arrangements senior staff at Allied Irish Banks.
This follows reports that the bank approached the department about setting up a financial incentives scheme to retain its top executives.
The bank's chairman David Hodgkinson is reported to have led exploratory talks with officials at the Department of Finance on reintroducing long-term awards for senior staff at the bank when it returns to profit.
AIB has declined to comment.
The State owns 99.8 per cent of the lender after injecting €20.8 billion from 2009 to 2011 at the height of the financial crisis. As part of the arrangements, the Government imposed a €500,000 salary cap on senior pay.
The Department of Finance today declined to confirm if it had been approached by AIB about setting up an incentive scheme but said it had no plans to change compensation policy in bailed-out banks.
“The number one priority for AIB is to get itself off the backs of the Irish public after it was foisted on them when it collapsed,” Labour TD and chairman of the Oireachtas finance committee Ciaran Lynch said.
“Any discussions on bonuses and remuneration in achieving this goal beggars belief and is unacceptable.”
Sinn Fein’s finance spokesman Pearse Doherty said: “Minister Noonan needs to be unambiguous in his response to these highly paid executives that a return to a bonus system is not on the table”.
Fianna Fáil spokesman on public expenditure Sean Fleming said there was no justification for the reintroduction of bonuses or incentive packages at AIB.
“As long as AIB fails to act to help people in mortgage arrears, is running a loss, remains almost wholly owned by the taxpayer and is not doing enough to meet the need of businesses in need of credit there can be no talk whatsoever of a return to a bonus culture.”
“The fact that executives would think that it was an idea worth pursuing gives a worrying glimpse into the emerging culture at the bank,” Mr Fleming added.
AIB’s chief executive David Duffy, in the job for just over two years, plans to return the bank to profit this year for the first time since 2009 as he completes more than 2,500 job cuts, rebuilds lending margins and bad-loan losses ease.
Mr Duffy, a former executive with South Africa’s Standard Bank Group, joined the bank in December 2011 on a €500,000-a-year salary, in line with a State-imposed salary cap on rescued banks.
He took a 15 per cent pay cut the following year as he cut compensation of senior bank executives. Allied Irish has replaced its entire board and most of its senior executives since its initial bailout in 2009.
Eleven bank executives had total compensation between €400,000 and the €500,000 cap in 2012, according to a Government-commissioned bankers’ pay report by consultants Mercer, published in March.
Some 116 executives at the lender were earning above €400,000 in 2008 as the financial crisis took hold.
