IRELAND’S Central Bank chief is being paid significantly more than the head of the equivalent body in the United States, the Federal Reserve.
Internal documents deciding upon the salary level for a new Deputy Governor in the bank have revealed that the governor of the Central Bank Philip Lane gets over 40% more than his counterpart in the US.
In an email sent to staff, Mr Lane disclosed that his salary was paid at the rate of €254,048 per year — as compared to just US$199,700 (or €177,040) for the chairman of the Federal Reserve.
He suggested that the new appointee as Deputy Governor Sharon Donnery should have her salary worked out by direct comparison to his.
In an email sent in January of this year, he said: “I propose a rule that the salary of the deputy governor be set as a fixed ratio to the salary of the governor. A clean benchmark is that the governor salary is a 15 per cent premium above the deputy governor salary.”
He said a similar system was in use at other central banks and listed the salaries paid for the heads of each of them.
In the UK, the salary for the head of the Bank of England was set at GB£305,764 according to the email while the head of the European Central Bank received €378,240.
Mr Lane’s suggestion meant a salary of €220,911 for his new second-in-command Sharon Donnery, which turned out to be €13,000 lower than the amount the Central Bank had earlier planned to pay her.
Internal documents reveal there was confusion over what level the deputy governor would be paid after her appointment in January.
Previous incumbents had been paid a variety of wages with Tony Grimes on €242,540, Matthew Elderfield on €311,351, Stefan Gerlach on €230,350, and Cyril Roux on €310,000.
The Central Bank had originally planned to pay Ms Donnery €223,636-a-year and confirmed this in writing to both Finance Minister Michael Noonan and then Public Expenditure Minister Brendan Howlin.
However, it was subsequently discovered that figure was incorrect and was almost €12,000 short of what it was supposed to have been.
An internal email from the resourcing section apologised for the error saying they “appreciate[d] the difficult position this now creates”.
When the correct salary was recalculated, the revised figure was discovered to be €235,125 and the contract for Ms Donnery was amended.
Another internal email on January 26 explained that they would now have to “send clarification letters to the relevant Ministers [Noonan and Howlin]”.
In response, Central Bank governor wrote: “Ok, it can be sorted tomorrow.”
The following day, internal discussions took place and it was decided that they would now be “taking another look” at the higher salary level.
By then, the Central Bank had made contact with a senior official in the Department of Finance to alert the government that the previously advised salary was incorrect, the email chain shows.
By the evening of January 27, a compromise arrangement had been decided upon and the salary of the new Deputy Governor was tied to that of the Governor and calculated as €220,911 per annum.
In a statement, the Central Bank said the Deputy Governor position has been filled “following an open competition, and salary was determined by the [Central Bank] Commission in accordance with legislation”.
They said: “In line with international practice and comparator central banks, the Deputy Governor’s salary was set as a fixed percentage of the Governor’s salary.
“The set salary is lower than that of her predecessors, and the Financial Emergency Measures in the Public Interest Act applies to all employees of the Bank.”
The full set of salary negotiation documents below with a few redactions to clear individual email addresses:
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