The annual salaries of Ireland's bank chief executives should not exceed more than about €800,000 at least in the short term, a government-commissioned report to go before the Cabinet on Tuesday has concluded.
If the government agrees to impose such a wage cap on Ireland's largest banks it will mean huge reductions in pay from previous highs. For example, former Anglo Irish chief executive David Drumm received €3.2m in 2007, while Brian Goggin, ex-head of Bank of Ireland, was awarded €2.9m in the 2007/08 financial year.
In view of the disastrous loan losses accumulated by Irish banks, there may be calls for a lower ceiling for the next three years at least.
The report details remuneration at individual institutions and accepts that banks with large numbers of employees still need to pay high salaries to recruit capable candidates.
It spells out recommended basic salaries across a range of institutions. Government sources said the basic salary cap suggested stretched from €650,000 at smaller institutions to €800,000 at the larger banks.
The report says remuneration among Irish bank chief executives had been out of control in recent years.
The report, by the Covered Institution Remuneration Oversight Committee (Ciroc), says the pay of Irish bank chief executives should be tied to that of industrial, transport, utility and manufacturing companies, which have traditionally had salaries lagging those of financial services.
The report also says performance bonuses should be tied to long term verifiable performance by banks and not short term quarterly or half-year performance, as has been the practice.
The government said recently it believed pay restraint was important in the overall context of the economy and it would "act accordingly''.
The role of Ciroc is to consider the remuneration plans of each of the institutions covered by the bank guarantee.