Bank of Ireland blames Irish salary cap as CFO announces departure


General view of a branch of Bank of Ireland in Dublin, Ireland on March 1, 2021. REUTERS / Clodagh Kilcoyne / File Photo / File Photo

DUBLIN, Sept.27 (Reuters) – The Bank of Ireland (BIRG.I) blamed state restrictions on bankers’ salaries and bonuses for the announcement on Monday that CFO Myles O’Grady would be leaving the bank and would join Irish food group Musgrave.

Ireland capped executive pay at 500,000 euros ($ 552,300) per year in the eurozone’s costliest bank bailout more than a decade ago. It has banned all forms of variable pay and benefits for even junior banking staff, restrictions lenders complain about preventing them from attracting and retaining talent.

Bank of Ireland chief executive Francesca McDonagh said on Monday that this had left the country’s largest bank in terms of assets at a competitive disadvantage compared to other companies and other members of the exchange who are not subject to the same restrictions.

“Myles’ decision to leave the Irish banking industry highlights the challenge that pay restrictions pose for Irish banks in attracting and retaining talent,” McDonagh said in a statement.

“The standardization of our operations is now vital for the long-term viability of the local banking sector,” she said.

O’Grady will remain in his post until he joins Musgrave in April 2022, the retail, wholesale and foodservice company said in a statement. Musgrave owns the country’s largest supermarket chain, SuperValu.

O’Grady’s predecessor, Andrew Keating, left the bank two years ago to take a senior finance position at Irish building materials supplier CRH (CRH.I).

In 2018, former Allied Irish Banks (AIBG.I) chairman Richard Pym described Irish banks as a training ground for their rivals after his bank lost its CEO and CFO within weeks .

The Irish government, which injected 64 billion euros or nearly 40% of annual economic output into its banks in the wake of the 2008 global financial crisis, has said it has no plans to relax restrictions.

It still retains a majority stake in AIB and permanent tsb (IL0A.I) and sells its 12% stake in Bank of Ireland.

Reporting by Padraic Halpin; Editing by Edmund Blair and David Evans

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