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THE FINANCIAL SERVICES Union (FSU) has said that any move to re-introduce bonuses for senior bankers “would not be acceptable” to staff and the general public if the Government’s new accountability regime for top executives isn’t in place beforehand.
After rescuing the main Irish banks from collapse during the financial crisis, the government effectively banned bonuses and capped pay for senior bankers.
But earlier this week, Bank of Ireland (BoI) chief executive Francesca McDonagh told RTÉ News that she would “encourage normalisation” of bonuses once the bank returns to private ownership.
The Government sold a small portion of its 14% stake in BoI on Tuesday after the lender posted better-than-expected interim results. The sale was part of a Government plan, announced by Minister for Finance Paschal Donohoe in June, to gradually exit the bailed-out bank by the end of the year.
McDonagh welcomed Donohoe’s strategy and told RTÉ, “We’d certainly encourage normalisation [of bonuses], particularly as we repay the taxpayer and we are returning to private ownership.”
She added that the bank would “operate within” European Banking Authority restrictions on bonuses if and when they are reintroduced.
But the FSU, which represents about 60% of the workforce in the bank, said the move would be unpopular if it occurs before the Government’s new accountability regime for senior figures at regulated financial firms isn’t operational.
In a statement, a spokesperson for the trade union told The Journal, “The FSU firmly believes that in the absence of Senior Executive Accountability Regime legislation being in place, that any move on executive remuneration in any bank would not be acceptable to staff, customers or the general public.”
Unveiling the Heads of Bill for the new regime last week, Donohoe said it could take another 12 to 18 months before the long-delayed piece of legislation will be enforceable by the Central Bank.
Positive results
Overall, the FSU said it welcomed BoI’s positive interim results, which showed the lender raking in pre-tax profits of €465 million in the first half of the year compared to a loss of €669 million for the same period in 2020.
Faced with the uncertainty of the pandemic, the lender moved to slash costs, announcing the loss of 1,700 jobs last year and the closure of 88 branches in the Republic and 25 in Northern Ireland.
“We look forward to the CEO of BoI making a statement on pay increases for the entire workforce in BoI, not just for the select few,” the FSU spokesperson added.
A BoI spokesperson told The Journal that the bank has no immediate plans to increase pay for all staff.
On the issue of returning the bank to private ownership, the FSU said it understands “the importance of a vibrant banking sector” in Ireland.
“The minister is committed to a Banking Forum on the future of banking — why not await the outcome of that review before divesting the state shareholding?
“We have sought a meeting with the minister.”
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Under the guise of keeping jobs and ensuring passengers will be able to travel in the future, private companies are trampling all over consumers rights. We all know that it’s extremely important to save jobs and to keep a business afloat that will save Irish citizens money in the long run. But the cost of this is worrying, a letter has been sent requesting that paying passengers money can be turned into a bailout fund for private business if needed. It’s that simple, if a private airline can’t fly, you won’t be able to get your money back. You get a voucher instead. They want to turn your money into an insurance premium. That you pay, not them. For Ryanair that gave 8 billion in the last few years to shareholders, it’s nothing short of scandalous that they don’t pay for there own insurance
@devils avacado: I’m sure the employees who have and will lose thousands in pay would happily take a voucher/credit at 110% which can be used to claim it back in the future.
@Zippy: I agree, and I am owed money for a family holiday that I’m happy to let them have as my family will use the voucher in the future. But I’m also aware that not everyone has a two income household like I do and can afford to take the hit of having an airline hang on to their money. Imagine if you were to do online shopping for groceries from let’s say Dunnes,, you placed your order and payed the bill only for the company to keep the money and not deliver your shopping. You get an e-mail saying the company is in hard times and they are keeping your money but you can have a voucher to use when they get back up and running. Do you think that would be seen as acceptable by the government?? So why are they asking the EU to make it acceptable for private airlines??
@devils avacado: you can bet that flight prices will also be inflated for 12 months as vouchers are being used, meaning you will have to add in some more of your money. You’re not getting an equivalent product in this scenario. SCC seems to be the most successful route for now, but this will likely be closed off too.
@devils avacado:
You’re completely right.. Unlike many of their competitors, AIG/Ryanair so far seem to have the capital to absorb this grounding. I think Ryanair would manage it with or without this voucher scheme but AIG, I’m not so sure.
EU are so quick to jump at things when it suits them, yet they are allowing airlines to behave like this, it’s not just legally wrong, it’s ethically wrong. If people can and want to, they can take vouchers but there are many people who need the money. Or, they have decided not to travel outside their homeland this year. Why should people be forced to subsidise a service that they don’t plan to use?
@Wreck Tangle: AIG?, what do insurance company have to do with any of this?
@James Padden:
He means IAG!
@devils avacado: no it’s not scandalous. Most airlines work off a 2% profit margin and they do factor in all sorts of anomalies but no one could have forecasted a 99% drop in business while trying to pay for a fleet of 300 aircraft including all associated running costs of a major international company. In fairness I don’t think Ryanair want to lay-off staff but I can’t blame them for wanting to hold on to badly needed cash in return for some kind of workaround. I’d be doing the same.
@devils avacado: whatever about the wrongs or rights about vouchers. The arguments about people can’t afford to loose this money is moot, they have already spent it so could afford it at the time, actually not going on flight/ holiday will mean you spend less than you would have
@devils avacado: you also need to factor in that an airline could potentially go bust. So you are investing your cash in the business with risk but no return.
For hotels in particular I would not leave any cash tied up with them. Airlines are less of a risk, but in both scenarios. Cash investment with risk and 0 return
@johnny onion eye: Not really like, many many people live pay cheque to pay cheque and have to take out small loans to go on travels, be they summer holidays or essential travel for bereavement, medical treatment etc. Whether they should or not is besides the point, according to BoI and other banks, holidays and travel are perfectly valid reasons to take out small loans. These loans will still have to be paid back with nothing to show for it.
Ryanair has €4BN in reserves,and still wants to keep customers money from cancelled flights and Leo varadkar is helping them to get EU law change, but we’re all in together Leo.
@@mdmak33: next time you book a Ryanair flight because it’s the cheapest or perhaps their schedule or airport the fly into suits your needs think of the idiot comment your making
@@mdmak33:
Well if Ryanair is going to let go 3,000 staff due to anticipated prolonged mkt demand contraction post covid19, it’ll need cash to pay redundancy, related amounts due.
CEO is just cutting his cloth by his measure & would never take state aid to prop things up just for sake of it, as was suggested by a UK union boss today on announcement.
MOL knows it’ll take years for Air Travel to return to pre covid19 numbers, so it’s bite-the bullet-time to preserve Ryanair model. He probably has eye set on a few planes going for a song, a cash job, so that his company can continue to offer remarkable value to the flying public around EU. Punters’ vouchers are as safe as cash in bank, but they should get an offer of a cheap seat as a sweetener.
Remember his bargain hunting after 9/11?
Here we go with the cuts…hopefully we can get back to normal soon
While it won’t save that much cost in the grand scheme of things, maybe its a good excuse for aer lingus to abandon the whole terrible rebranding idea and change of livery!
@ThatLJD: ffs the liverly is the least – i would say completely insignificant issue facing any airline – high infection rates around the world and closed economies – jaysus they couldnt give a shite about the logo on the bleedin planes
@Dave Hammond: I get ya brother, I was merely saying it would be a good excuse to abandon it, it’s terrible.
@ThatLJD:
Honestly, the new livery has grown on me. But now we’re going to have a situation whereby they’ll be flying two liveries for several years.
@Sequoia: ladt thing I’d have expected of you Sequoia, you’re old, you’re meant to dislike change! Well if you can embrace it then maybe I too can embrace waiting for that now white, once green, plane to roll in!
“Labour Party TD Duncan Smith said that the government needs to intervene to project jobs.
The government needs to extend the temporary wage subsidy scheme for industries that are going to be key for getting us back on track such as Aer Lingus. It is clear that the government need to take urgent action to address the potential torrent of job losses that could occur at Dublin Airport between Aer Lingus and Ryanair.”
Where’s the business case deputy? What jobs are you protecting? This is an industry that not only cannot carry out operations today but also expects no demand in the coming months? Perhaps its better value for the taxpayer to lay them off and let them get ready to find a new job.
@Wreck Tangle: As a Swords-based TD, I don’t think Duncan cares about a business case!
@Wreck Tangle: probably the same business case that has seen USA- $25bn support for United, Delta and American. France- €7bn for Air France. Netherlands-€4bn for KLM. Germany-€10bn for Lufthansa. Italy, Austria, Norway similar.
@Zippy: unions are keeping Duncan’s party’s balance sheet in the black and he is based in Swords so it’s not surprising to see him pipe up about some of his constituents. The WSS will work here if employees accept that they will only be paid the subsidy and not that plus normal pay. The unions at Aer Lingus will definitely not accept that for all staff so redundancies are the only alternative.
What this pandemic is showing is that we should stop flying, stop eating meat and never end up in a care home
I’m glad to hear this. Corporate greed will entail you this at times of pandemic. Tell me if you’ve been ethically correct?
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