FIANNA FÁIL has tabled new legislation which would see senior bankers’ bonuses put on ice for five years – and only released if the bank does not start making losses in the intervening period.
The Credit Institutions Stabilisation Amendment Bill 2012 – which the party is dubbing the ‘Bankers Bonuses Bill’ – would apply to all bankers whose annual salaries are over €60,000, and where the banker is due a bonus of over €1,000.
If the bank loses more than €100,000 in the intervening five years, the bonuses will no longer be paid – though employees who, in the “reasonable opinion” of the bank, were not to blame for any losses would still be entitled to get their bonus when the five years have elapsed.
The party’s social protection spokesman Willie O’Dea said the proposals would shift the emphasis in banking from short-term incentives to a more long-term perspective.
Banks would be required to invest all deferred bonuses in an interest-bearing account which would be managed independently on its employees’ behalves.
“This is not about taking small bonuses from hard working bank staff who earn a small boost at Christmas,” O’Dea said.
“This is about stopping a situation that we have seen all too often in the past, where bank bosses earn excessive bonuses while jobs are cut and performance remains weak.”
The former minister added that bonuses should be considered discretionary payments in exchange for an exceptional performance, and not merely an extra part of someone’s guaranteed income.
“Given the state of the banking sector at this time it is not acceptable that bank bosses would continue to get large bonuses that do simply do not reflect the current job market or the performance of the sector,” he said.
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