Executive pay might be increasing at AIB, but salaries are still generally on the decline
The fact that AIB appears to be on the cusp of succeeding in its quest to pay its new chief executive more than €500k (possibly a €1m package) is likely to spur a new wave of public anger in Ireland over banker remuneration. However, it's worth noting how much rank-and-file staff at the bank have felt the pinch in the last few years.
Bonuses haven't been non-existent since 2008, but they've certainly been greatly reduced. Salaries have also largely been frozen (or decreased) over the last three years and, as yet, there's no sign of this changing.
The amount of money AIB spends on its employees has fallen sharply since the financial crisis hit. In 2008, the bank shelled out nearly €1.2bn for its 16,039 staff (excluding those in its discontinued Central and Eastern European operations), a figure that reduced by nearly 20% to €921m in 2010 despite headcount shrinking by only around 11%.
All of this is unlikely to elicit much sympathy from the Irish public, of course.
However, AIB has still yet to confirm exactly when its planned 2,000 redundancies are likely to take place and redundancy terms (expected to be decidedly less generous than in the past) haven't been agreed.
Larry Broderick, general secretary of finance union the Irish Bank Officials' Association, says that the bank is failing to treat its employees "due care and respect" while also "offering excessive rewards to senior executives - past, present and now future."
Let's not also forget that while AIB is firing, it's also still hiring. Financial professionals are being hauled in to work on distressed property assets and, while pay might be on the up for manager level recruits, generally it's on a downward trajectory.
One headhunter working with the bank says that AIB and Bank of Ireland are two of the few institutions in Ireland you can "hang your hat on being here in a few years' time" and that candidates are increasingly making job moves based on long-term career prospects rather than current remuneration.
"Despite the increased demand, the banks are not being held to ransom over pay. People are taking pay cuts - as well as a reduction in benefits - to secure a role at AIB, largely because of a lack of other options. There's a lot of one-upmanship in the industry, which can exaggerate pay packets, but they're generally on a downward keel."
