The pending sale of the Davy business for up to €605 million to Bank of Ireland and other parties was certainly one in the eye for those who said the brand was toxic and that they’d do well to achieve half that amount for a business that was rocked in March following a Central Bank of Ireland fine of €4.1 million, for a controversial bond trade.
It was also a feather in the cap for Bernard Byrne, who was thrust into the position of Davy interim chief executive following the sudden departure of Brian McKiernan in the wake of the fine.
It is not clear if Byrne will remain with Davy once the various regulatory approvals have been received some time next year. If he does, the former AIB chief executive would find himself reporting to Bank of Ireland chief executive Francesca McDonagh, who would have been an industry peer prior to his quitting the bank for Davy in 2019 to become the stockbroker’s head of capital markets.
Under an arrangement nodded through by the Minister for Finance, Paschal Donohoe, Davy staff will retain their right to a bonus – something that is currently denied to those at the bank, which is 14 per cent owned by the State, having received a financial bailout post the 2008 financial crash.
This could lead to the intriguing prospect of Byrne being eligible for a bonus while his boss is not (though she is paid an annual basic salary of €950,000). Part of the attraction of Davy to Byrne had to be the opportunity to earn variable pay, something that was denied to him as CEO of AIB, which is 71 per cent owned.
Of course, this position will change once the State has sold down its remaining stake in Bank of Ireland in the coming months, something that has been flagged to the markets. In the meantime, expect there to be fierce competition among Bank of Ireland staff to be one of the 80 employees who will move to Davy by the end of 2022 and become eligible for bonuses at the stockbroker.