Bankers’ Pay in Ireland: Why It’s Rising After the Crisis

The return to substantial profitability at Ireland’s major banks – AIB, Bank of Ireland, and PTSB – is coinciding with a resurgence in executive pay, sparking renewed debate about remuneration in the financial sector. After years constrained by a pay cap imposed in the wake of the 2008 financial crisis and subsequent bailout, the lifting of those restrictions is allowing for significantly increased compensation packages for top executives.

The backdrop to this shift is a combined profit of €3.6 billion reported by the three banks last year, with shareholders set to receive around €3.5 billion through dividends and share buybacks. Bank of Ireland, AIB, and PTSB are all demonstrably healthier than they were during and immediately after the financial crisis, but the optics of rising pay are sensitive given the historical context.

The Weight of History

The current scrutiny of banker pay is deeply rooted in the Irish experience of the 2008 financial crisis. The reckless practices of Irish banks were a major contributor to the country’s economic collapse, leading to a €64 billion taxpayer bailout and years of austerity. Beyond the direct financial cost, the crisis resulted in a brain drain, widespread economic hardship, and a prolonged period of underinvestment in infrastructure and housing – consequences still felt today. The subsequent Mortgage Tracker scandal and ongoing concerns about bank support for businesses have further eroded public trust.

The memory of exorbitant pay packages awarded to bank executives *before* and even *during* the crisis remains potent. In 2006, Brian Goggin, then CEO of Bank of Ireland, earned almost €4 million. Even as the bank’s performance deteriorated, his compensation remained high, reaching over €3 million in 2009 – a year after the State invested €2 billion to prop it up. Similarly, Eugene Sheehy, AIB’s boss during the same period, received over €2 million in 2007 and nearly €890,000 in 2009 (after a €2 billion State investment). Denis Casey, CEO of Irish Life & Permanent (now PTSB), earned over €1 million before the crash and received a total pay-off of almost €4.6 million upon his resignation in 2009. Michael Fingleton at Irish Nationwide even took a €1 million bonus in 2008, while the bank was losing hundreds of millions of euros. David Drumm at Anglo Irish Bank was paid as much as €3 million annually.

The Pay Cap and Its Removal

In response to public outrage, a pay cap was introduced limiting executive pay to €500,000 and effectively banning bonuses. This cap was initially lifted for Bank of Ireland in 2022 when the State exited its shareholding. Last year, following the Government’s complete sale of its stake in AIB, the cap was also removed for that institution, and simultaneously for PTSB, to ensure a level playing field. A €20,000 cap on bonuses remains in place.

The removal of the cap has already translated into increased compensation. At AIB, CEO Colin Hunt’s total package rose from €644,000 in 2024 to €793,000 last year – a 23% increase. His salary is set to rise to €1.35 million this year, more than doubling in two years. A novel ‘Fixed Share Allowance’ scheme could potentially award him up to an additional €1.35 million in shares, contingent on the bank’s financial performance. Bank of Ireland is employing a similar scheme. At PTSB, Eamon Crowley’s total pay package increased to almost €713,000 last year, up from just under €600,000 in 2024 – a nearly 20% increase. Meanwhile, Myles O’Grady, CEO of Bank of Ireland, received around €1.86 million last year, with over €710,000 coming from the Fixed Share Allowance plan.

Comparing Irish Banker Pay to Peers

The banks defend the increased pay by arguing that they must offer competitive compensation to attract and retain talent, not only from each other but also from multinational financial firms operating in Ireland and across Europe. Data from the European Banking Authority shows that in 2022, an Irish-based investment banker earned €24 million in one year, with several others earning between €6-7 million. While acknowledging that investment banking differs from retail banking, the banks point to this as evidence of the broader compensation landscape.

AIB’s annual report suggests that its CEO’s pay is currently in the ‘median-to-lower quartile’ compared to other European banks, and below the average when including potential bonuses. For example, David Duffy, formerly of AIB and later Clydesdale Bank (now Virgin Money), earned an average of €1.9 million annually over eight years at the latter. Anas Abuzaakouk, CEO of Austrian Bawag Group, earned €6.14 million in 2024, significantly more than Colin Hunt’s current package. Denmark’s DanskeBank CEO earned €3.3 million, a figure comparable to the potential top end of Hunt’s earnings this year.

Looking at Irish CEOs more broadly, even with recent increases, bank bosses are not the highest paid. Jim Mintern of CRH could earn up to $13 million, Peter Jackson of Flutter Entertainment earned the equivalent of €19.5 million in 2024, and Edmond Scanlon of Kerry Group earned over €6 million. Michael O’Leary of Ryanair received €3.8 million and is in line for a €100 million bonus if he remains with the company until 2028.

The Argument for Higher Remuneration

Banks argue that competitive pay is essential to attract skilled professionals, particularly in areas like IT, security, and data analytics, where they compete with tech giants like Google and Amazon. They contend that a tiered pay structure, starting with the CEO and cascading down through the organization, is necessary to attract talent at all levels. The argument is that restricting pay at the top limits the overall compensation pool available for the entire workforce.

What’s Next for Banker Pay?

The trajectory of banker pay will likely depend on the continued profitability of the Irish banks and the broader economic environment. The State retains a €20,000 cap on bonuses, which may temper some of the increases. Further scrutiny from the public and political spheres is inevitable, particularly as mortgage interest rates remain above the European average, as reported by RTÉ. The performance of the banks’ share prices and their ability to navigate evolving regulatory landscapes will also play a role in determining future compensation levels.