Monday, 12 November 2012

Mike Aynsley defends bankers' high pay

"If you pay peanuts, you get monkeys".

Old saying.

But might things have worked out better for our  banana republic had a troupe of monkeys been in charge of our financial institutions and government in the not-too-distant past?   

Might they have done somewhat better than lower primates such as Seanie Fitzpatrick, Michael Fingleton, Charlie Mc Creevy, Bertie Ahern and all the rest?

Bailed-out-bank boss MIke Aynsley would appear to consider anything below 400 or 500 thousand euro to be peanuts.   So monkeys still won't get a look-in, it seems.

Not enough money to attract "talent" to our bankrupt banks, you see.   You know that old argument that served us so badly in the past, as even now our own prime minister is paid more than Barack Obama, and our senior civil servants enjoy extravagant pay and pensions.

Have a read of the article below.  It's enough to make you go ape.

Thanks to a reader for sending in the article.  

Anglo boss Mike Aynsley defends executives' €500,000 pay

But our bankers heavily criticised in influential global financial newspaper
Irish Independent, Friday November 09 2012
THE boss of the former Anglo Irish Bank – now IBRC – has robustly defended the €500,000 salaries paid to his top officials.
In an exclusive interview with the Irish Independent, Mike Aynsley said the public should not be "bloody-minded", nor should they believe that "all bankers don't deserve to be paid these high levels".
Mr Aynsley said IBRC was an "easy target" for people who wanted to bash at bankers because it was seen as the bank that took the country down.
Speaking at his headquarters in Dublin, the Australian, who was brought in to sort out the mess of Anglo Irish Bank, said there was a high turnover of staff at the bank and that he needed high salaries in order to keep good staff.
"There are certain types of individuals that are critical for us in the tapestry of this workforce that we cannot get for less than this sort of money." Mr Aynsley continued: "You can't lose qualified people who manage complex accounts and just transfer an IT specialist or a human-resource specialist to that position."
The IBRC chief 's comments put him on a collision course with the Government, which is under growing pressure to address the thorny issues of bankers' pay and pensions.
The issue of high pensions for Irish bankers is also tackled in a hard-hitting editorial in today's 'Financial Times'.
The editorial – which is headed "Dublin's shame" – says that Ireland's bankers have not covered themselves in glory in recent years.
Finance Minister Michael Noonan and Tanaiste Eamon Gilmore have insisted that they will push for lower salaries at IBRC, which is 100pc-owned by the taxpayer.
When asked if he would bow to political pressure to cut salaries, Mr Aynsley said he had a work force to protect and that he would continue to run the bank on a commercial basis.
"We have a team that has done a tremendous job chasing the problem areas in this institution. The biggest has been Sean Quinn," he said.
"I think we are an easy target for people who want to bash away at banks. Because we are the bank that is seen to have taken the country down. On the other hand AIB and BoI have been designated pillar banks and I think rightly, they need to be positioned for recovery."
He warned that the loss of good staff would cost the taxpayer in the long run.
"There is a direct link between the quality of people we have and the recovery of assets.
"As a country, if we don't recognise this, we are going to find that we won't have enough good people and we will just be exploited by people who want to come in here and buy at the bottom of the market."
IBRC's top six executives earn more than €500,000 each.
Mr Aynsley is paid €663,000 -- a €500,000 salary, allowances of €38,000 and a pension sum of €125,000.
The head of IBRC's UK operations, Jim Brydie, is on a salary of £400,000, or €501,000.
Chief financial officer Jim Bradley; head of asset recoveries Tom Hunersen; head of Irish recoveries Mark Layther; and head of specialised asset management Richard Woodhouse, are each paid a salary of about €400,000. They also receive the equivalent of 25pc of their salaries in annual pension payments -- on top of €30,000 each a year in allowances.
Mr Aynsley's outspoken defence came as Michael Noonan, who controls IBRC, said he would continue to push the issue. The Finance Minister has admitted that he asked IBRC's chairman Alan Dukes for wage cuts at the bank, but said his request was turned down.
"I wrote to Alan Dukes and I asked him to talk to the board of IBRC to impose a pay cut right across the pay levels because it was done for the public service and I can't see why it wouldn't be done elsewhere," Mr Noonan said. The request was made on April 5.
A review of pay at state-controlled banks is expected to be completed by the end of the year by consultants Mercer.
Pay rates will be assessed under the review but the Irish Independent understands that it will not offer the Government any new tools to force pay cuts or change terms and conditions of bankers.
Senior political figures last night vowed to tackle the issue.
Tanaiste Eamon Gilmore said there was the "political will" to tackle the pay packets. These exceed a government-imposed cap on the pay of anyone taking up a new job in a bank.
"It is not acceptable to the Government or people of this country that these levels of either pensions or salaries should continue to be paid," he said.
The Tanaiste said Mr Noonan was looking at the various options "that may be open to Government" and had declared that there was the "political will" to deal with the issue.
However, Public Expenditure Minister Brendan Howlin has confirmed that bankers cannot be singled out for higher taxes.
"You can't simply say, 'you and you will pay extra'," he said, adding: "This is careful and delicate work and we need to bring fairness to it."
- Maeve Dineen, Colm Kelpie and Donal O'Donovan


Anonymous said...

TBH I have absolutely no problem with bankers being paid extremely high salaries when they are especially talented at what managing assets of such magnitude. We need talented people now more than ever. Half a million EUR is indeed peanuts in international terms within the world of high finance. The problem is when such salaries are undeserved, as is a running problem in Ireland. Mr. Fitzpatrick is certainly a prime example of that. The trouble with Irish banking is not the high salaries, the problem is paying high salaries to people who aren't earning it who got those terms by greasing the right palms or by knowing the right people.


Anonymous said...

Have to agree with Bulwark. Anyone who does not get paid what he/she can get in some bank in London will just skip off there tout de suite.

The real issue is why we still have witless morons like Noonan & Gilmore in charge. Weren't they supposed to be 'burning the bondholders'? They never learn.

DB said...

Just as paying our consultants more here than anywhere else in europe and ditto our teachers and politicians ensures we have the very best in the world. Im all for Mike and co paying themselves exorbitant amounts to run our state owned bailed out banks.

Anonymous said...

DB, high salaries attract the best and the brightest, but you have to actually hire them. A high salaried idiot is still an idiot.


Ella said...

"Mr Aynsley said he had a work force to protect and that he would continue to run the bank on a commercial basis." - Pity the bank had not been run on a commercial basis all along because if it had it would have gone bust and none of our money would have bailed it out.

The Gombeen Man said...

So what's the going rate, across Europe, for a bank executive - the sort of which Mr Ansley wants to attract - folks?

Are there no up-and-coming "movers and shakers" who might work for less than our failed bankers did, yet still do a better job?

You know: "hungry", "lean", "looking to make a name for themselves", and all that?

DC3 said...

@ Bulwark. Hi there, "TBH I have absolutely no problem with bankers being paid extremely high salaries when they are especially talented at what managing assets of such magnitude." Contradiction in terms there.

@ Anon. "Anyone who does not get paid what he/she can get in some bank in London will just skip off there tout de suite." WELL LET THEM.

With all due respect, look, lets stop the crap shall we, most of these so called high-ended accounts are either run by, or subjected to, overtly sophisticated algorithms. You would be hard pressed to find, one, in European banking, never mind the JOKE which is Irish State Banking knowing what the HELL and algorithm is, nevermind its implications for financial networks. There is no one in Irish banking WORTH more than 70,000 euro. The Finacial "Sham" Disaster STILL has not sunk in yet...

Capitalism EATING itself...Emmm great to be bailed out but then wanting to be paid 500,000 to administer the disaster is BEYOND COMICAL.

Oh and by the way, with all due respect, we get the Government the "People" vote for.

"Weren't they supposed to be 'burning the bondholders'?" Yep, and you could can count the number of sincere people who give a toss by using no fingers.

Same mindset applies as to that present during the Bubble...History says, an Irish vacuum and traditional resentment are never good news eventually.

The Gombeen Man said...

I think the government is far too wasteful of taxpayers' money.

We have that old "flight of talent" argument made in relation to RTE's extravagantly paid presenters.

We have the same for other state-supported and funded sectors including teachers, gardai, and top civil service jobs… even though it’s converse “attract top talent” does not stand up as they recruit within Ireland from a limited pool of utter mediocrity.

There are competent people from abroad who would take such jobs at the drop of a hat, for less pay too.

Would we really miss our presenters, teachers and top civil servants if they went? And would anyone else have them? I think not in both cases.

Could we recruit better from here or abroad with more talent who work do the job for less? I think so.

I think the "it's because I'm worth it" argument has been exposed here as a self-serving one long ago.

My feeling is that it would not be too big a leap for to apply the analyis to banking.

Anonymous said...

The problem with having top talent, in any industry (of which banking is just one instance) is that you have to both attract them and keep them. Often though, that talent gets stuck in an inflexible Irish management system which puts connectedness and gregariousness above intelligence and talent. Too often have I seen top talent being brought in for less money because they *wanted* the job, get treated like crap by people above (who earn far more) who don't have anything other than the gift of the gab (aka spoofing), forcing the top talent to turn and run away at the first opportunity. High pay alone is not enough, talented people need to be in an environment in which they can flourish, or they just leave. However, pay an unscrupulous well-connected but incompetent person the same high salary, with no competent oversight of what they can really do, and they'll feel like they hit the jackpot and stick around as long as possible.

So GM, you're right, there are movers and shakers willing to take up a challenge, in Ireland or elsewhere... they just usually leave empty-handed and disillusioned. Remember back in 2009 where Mazars audited the Financial Regulator and found them populated with lots of highly paid managers and pencil pushers but very thin on specialist technical and actuarial top talent? Imagine if there were competent people there from top to bottom? Might have caught a few billion bob moving in and out of Anglo?


Anonymous said...

what about NAMA hiring bust builders to manage their contracts.
Most of them nevered managed or built anything other than housing units. Most of them built houses flats hotels or nursing homes.Where all the tax breaks were. The few top construction firms that built civil projects and jobs requiring compliated structural are still in business and should have got the contracts.

DC3 said...

My view is the Bank formerly known as Anglo should have been closed down, obliterated. Paying 500,000 is downright obscene and offensive to anyone in an IRISH Bank. Fantasty Island. Public endorsed STUPIDITY. Too much television. ETC...

It's a backward and tricky land GM, that will never change. You can't unscramble an egg.

"teachers, gardai, and top civil service jobs" It's a JOKE GM but then I remind myself it is Ireland and it all makes sense...Disconnect is and always has been part of the culture.

Though it does leave one asking GM, why are people constantly surprised by the consistency for messing things up in Ireland? This has been the way for the last 90 years. Why does each generation have to learn the hard way, and STILL PREDICTABILY say it's a grand country? All while revelling in its unending mediocrity and hardwired resentment. Is it GENERATIONAL FEAR?