The chairman of Permanent TSB and the bank's non-executive directors are to take a 10 per cent cut in their annual fees, from June 1st, as the bank seeks to achieve an 8 per cent reduction in remuneration costs across the group.

Staff have already been informed that the bank intends to wind down its defined-benefit pension scheme.

Chief executive Jeremy Masding is to take a cut in the company's contribution to his pension scheme as part of the drive to encourage staff to accept a move from a defined-benefit scheme to a defined-contribution scheme. The achievement of such a change is a key part of the plan to reduce remuneration costs.

Reduction in costs
Mr Masding wrote to all staff yesterday outlining his determination to achieve the reduction in costs being targeted by the bank. The chief executive, who received a salary of €353, 000 last year, gets a pension contribution from the company based on his salary. Last year the payment was €50,000. He was appointed to his role on February 28th last year

Chairman of the bank Alan Cook is paid an annual fee of €200,000, while non-executive directors receive €56,000. They receive extra remuneration for their work in chairing board committees and are not members of a bank pension scheme.

The non-executive directors received the following fees for their work last year, according to the annual report: Emer Daly (€84,000); Margaret Hayes (€64,000); Piotr Skoczylas (€42,000); Sandy Kinney (€56,000); Ray MacSharry (€56,000); Dominic Dodd (€14,000); and Pat Ryan (€92,000). Mr Dodd joined the board last October.

The bank reported a pretax loss of €922 million. In his letter to staff, Mr Masding said the 8 per cent target in cost cuts was “a binding imperative and commitment”.