Credit Suisse's incoming CEO for Europe disagreed with remuneration policies imposed on her previous employer.

Bank of Ireland (BoI) CEO Francesca McDonagh has stepped down as CEO of the Bank of Ireland, becoming Credit Suisse's new CEO for the EMEA region, the Swiss bank announced Wednesday in the connection with its first-quarter results.

Following a 2009 bailout by the Irish government in the wake of the European banking crisis, executive pay was capped at €500,000 in Ireland for institutions rescued by government funding. However, McDonagh received an exemption and subsequently earned nearly twice as much, according to a report in the «Financial Times» (behind paywall).

Salary Cap Exemption

The Bank of Ireland confirmed to finews.com her remuneration of   €960,000 last year, which was similar to the package her predecessor received and done in agreement with the Irish Department of Finance. 

In the case of the Bank of Ireland, the state was a minority shareholder, holding a 15 percent stake, now reduced to the current level of 5 percent. 

Misaligned Remuneration

While saying she fully understood the restrictions being put in place at the time, they are «out of step with reality now», McDonagh said in an interview she gave last month to Ireland's «Business Post». She also doesn't expect the cap to be fully dropped but is in favor of the bank being regulated in line with its competitors.

The bank paid the Irish government back nearly a decade ago, according to the «Financial Times» report, but remains hamstrung by the remuneration cap, presumably prompting other executives to leave the bank. CFO Myles O'Grady left BoI in September, following Andrew Keating who held the role before O'Grady left in 2019, the «Financial Times» said.

Prior to joining the BoI McDonagh was at HSBC for two decades, holding a number of senior leadership roles in private and investment banking along with wealth management. Her two decade career there led her to work in seven different countries. She also previously served on the board of the British Bankers' Association.