STATE-owned AIB has proposed a new payment structure for its non-executive directors which will see their basic yearly fee more than double, but other payments cut.
Fees for duties like attending meetings, serving as a committee chair or on the board of a subsidiary company are all being reduced.
The bank said the new structure, to be signed off by shareholders, would see the total amount paid to the executives fall by about 9pc compared to last year. Under the move, the basic annual fee paid to non-executive directors rises to €65,000 from €27,375.
AIB’s non-executive directors include former National Treasury Management Agency (NTMA) chief Dr Michael Somers, who also serves as non-executive deputy chairman, and former Labour Party leader Dick Spring, who were appointed by the Government.
The resolution will be put before shareholders at the annual general meeting on June 19. If approved, it will then be applied for the entire of 2014.
A spokesman for the Department of Finance said the voting intentions of the Government, which holds a 99.8pc stake, will be finalised once notification of the AGM has been received. However, the bank’s annual report points out that the revised fees structure was “implemented” following consultation with the Department.
“As per the AGM documentation sent to shareholders, AIB is seeking approval for a revised structure of fees paid to non-executive directors,” an AIB spokeswoman said. “The effect of the change is a further reduction, following a voluntary 25pc reduction in 2009, to the aggregate level of fees paid to the current group of non-executive directors based on their current membership of the Board, Board Committees and Subsidiary Company Boards.”
Fees paid to non-executive directors, with the exception of the chairman and deputy, have previously included a basic annual fee of €36,500, which was voluntarily cut by a quarter in February 2009.
Extra payments are given for attending meetings and performing extra duties.
David Hodgkinson, the non-executive chairman, and Mr Somers, were last year paid a flat, non-pensionable fee of €275,000 and €150,000 respectively for all their services.
In a letter to shareholders, Mr Hodgkinson said the total fees paid to non-executive directors last year amounted to €1.16m. Under the new structure this falls to €1.06m.
Under the revised structure, which will apply to all non-executive directors except the chairman, the meeting attendance fees will be replaced with a lower committee membership flat fee. There will also be a cut in the flat fees payable for the chairmanship of committees and membership of subsidiary company boards.
But the basic annual payment will rise to €65,000. Mr Hodgkinson said the proposed new structure was consistent with other companies.