AIB IS set to appoint Dan O’Connor as executive chairman on an interim basis while it continues its search for a suitable external candidate to become its new chief executive.
It is understood Mr O’Connor, who serves as AIB’s non-executive chairman, could occupy the executive role for up to a year. He joined the bank’s board in 2007.
The move comes as AIB seeks to reach a compromise with the Government about the appointment of a new chief executive to succeed Eugene Sheehy.
The bank is also expected to appoint Irish-born former Bank of America executive Colm McCarthy to a senior position with the company.
At one point, Mr McCarthy – whose brother Dermot is secretary general at the Department of the Taoiseach – was reported to have been approached by AIB to succeed Mr Sheehy as chief executive. He was also linked with the top job at Anglo Irish Bank.
Mr McCarthy joined Bank of America in 1979 and held various key positions, including president of Asia, head of Asia and director of the bank’s legal entities in Singapore, Malaysia, Hong Kong and Japan. He retired from the bank in June 2008.
It is not clear what role Mr McCarthy will assume with AIB.
It is understood that Mr O’Connor’s decision to take on the role of executive chairman follows discussions recently with Minister for Finance Brian Lenihan.
The decision would bring to an end a lengthy standoff between the board of AIB and Mr Lenihan over the appointment of a successor to Mr Sheehy, who announced his intention to retire from the bank earlier this year.
The Government is keen to have an external candidate appointed as AIB’s next chief executive. But it is understood that a number of external candidates approached by the board of AIB declined to take on the role.
Reports suggested that the proposed salary of €500,000 – which forms part of the Government’s bank guarantee scheme – was not sufficiently attractive to interest an overseas candidate.
But it is understood that the Government indicated some time ago its willingness to be flexible on the remuneration issue if the right person could be hired.
In the absence of an external nominee, the board of AIB felt that Colm Doherty, the head of AIB’s capital markets division, was the strongest candidate for the job.
The board is believed to have made this known to Mr Lenihan, who is understood to have held his position that an external appointment was more appropriate in light of the State’s banking guarantee and the billions that AIB has received in taxpayer funds.
Mr O’Connor will take day to day responsibility at the bank. He had previously resisted overtures from the Government to take on the role on a permanent basis.
His decision was revealed in a report by the Sunday Business Post yesterday.
Mr Doherty, meanwhile, is expected to be be offered a new senior role at the bank, possibly that of chief operating officer.
AIB declined to comment on the potential changes in its executive structure. No comment was available from the Department of Finance.
But informed sources indicated that these changes will be implemented shortly. AIB is due to submit a business plan to the European Commission later this month for approval in the context of the State’s equity involvement in the bank.
AIB recorded a loss of €786 million in the first half of this year, a period when it received €3.5 billion in capital from the Government. It is set to transfer €24.1 million in bad loans to the State-backed National Asset Management Agency (Nama).
