Bank of Ireland CEO quits, with salary cap blamed

Bank of Ireland Group CEO Francesca McDonagh

Bank of Ireland announced late on Tuesday that Francesca McDonagh has informed the board of Bank of Ireland Group plc of her intention to step down as group chief executive officer.

Analysts blamed a salary cap that was imposed at banks in Ireland that were bailed out by the government during the financial crisis a decade ago.

McDonagh is expected to leave Bank of Ireland in September 2022.

A process to appoint her successor will now commence.

McDonagh said: “While I will leave Bank of Ireland with a heavy heart, I am proud of all that we have achieved.

“Five years ago, we set out to transform the Bank’s culture, systems and business model.

“The benefits of this transformation have never been clearer than over the past two years as we navigated the pandemic while also agreeing two significant acquisitions.

“In addition, the strong progress we have made has facilitated the Irish Government in selling down its shareholding and has further reset the State’s relationship with the Bank.”

Earlier this month, the government of Ireland extended the sell down of its shares in Bank of Ireland for another six months after raising €532 million since last August by cutting its stake from 13.9% to below 5%.

Last September, McDonagh blamed government restrictions on bankers’ pay and bonuses in Ireland for the announcement that chief financial officer Myles O’Grady would leave the bank and join Irish food group Musgrave.

McDonagh said in September: “Myles’ decision to leave the Irish banking sector highlights the challenge that remuneration restrictions represent for Irish banks in attracting and retaining talent.

“The lack of a level playing field means Bank of Ireland is at a competitive disadvantage to other companies, corporates and PLCs who are not restricted in the same way.

“Any company in a similar position would highlight this as a serious challenge.

“The normalisation of our operations is now vital to the long-term sustainability of the indigenous banking sector.”

Bank of Ireland chairman Patrick Kennedy said: “Francesca has been an exceptional chief executive of Bank of Ireland.

“Since taking up the position in 2017, she has driven – with ambition and commitment – a clear strategic focus on transformation, service improvement, and business growth.

“Along with agreeing two transformative acquisitions, she has delivered a more efficient, digitally-enabled, customer-focussed and profitable bank.

“All of this strongly enhances the group’s long-term sustainability.

“The impact of Francesca’s many achievements will live long beyond her time at the bank.

“On behalf of the board, I would like to wish her well for the future.”

About the Author

Mark McSherry
Dalriada Media LLC sites are edited by veteran news journalist Mark McSherry, a former staff editor and reporter with Reuters, Bloomberg and major newspapers including the South China Morning Post, London's Sunday Times and The Scotsman. McSherry's journalism has also appeared in The Washington Post, The Guardian, The Independent, The New York Times, London's Evening Standard and Forbes. McSherry is also a professor of journalism and communication arts in universities and colleges in New York City. Scottish-born McSherry has an MBA from the University of Edinburgh and a Certificate in Global Affairs from New York University.