Expert Corporate Governance Service (ECGS)
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AIB Group - AGM 24 April 2019

Items 3 and 4: To authorise the directors to determine the remuneration of the auditors and to approve the continuation of Deloitte as auditor

Average non-audit fees incurred over the last three years were 158.8% of audit fees, which is above our limit of 50%.  These fees are considered excessive and may undermine auditor independence.  We recommend that shareholders oppose these resolutions.

 Item 7: Approve the Remuneration Policy

 The cap on salaries and allowances in the amount of €500,000 (plus pension contributions of 20%) will continue to apply.  This cap was implemented due to the recapitalisation of AIB by the Irish Government in 2010 and 2011.

Last year, an incentive plan was proposed, but the Minister for Finance of Ireland, which owns 71% of the share capital, voted against the plan.  The Irish state is reviewing remuneration across banks impacted by the pay cap.  The remuneration committee may propose changes to the structure following this review.  Though incentive pay could better align executives' interests with shareholders' interests, there is a clear justification for the absence of incentive plans at the current time. We recommend shareholders vote in favor.

AIB Group

AIB Group is a financial services group operating predominantly in the Republic of Ireland and the United Kingdom. Co. provides a comprehensive range of services to personal, business and corporate customers. Co.'s operations are organized along three key segments: AIB Ireland (comprises Personal, Business and Corporate Banking); AIB UK (comprising Allied Irish Bank which offers full banking services to predominantly business customers across Great Britain; and First Trust Bank which offers full banking services to business and personal customers across Northern Ireland); and Group & International (syndicated and international lending in the United States of America and Europe).


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