<div><p>Irish Prime Minister Brian Cowen said Wednesday that a new boss of Allied Irish Bank will take a pay cut to comply with a salary guideline cap of 500,000 euros (745,000 dollars).</p><p>On Tuesday, the government had rejected a request from AIB to continue to pay senior executive Colm Doherty his current 633,000-euro annual salary if he took the newly-created post of managing director.</p><p>Cowen told the Dail, or lower house of parliament, that internal and external appointments would be made as part of an AIB management re-shuffle.</p><p>He said this would ensure that AIB's "culture, structure and management team is ideally equipped to lead the bank though this critical period."</p><p>"All of this is happening on the basis that the government is insisting that we proceed in this manner," Cowen said.</p><p>"What's most important... is the fact that we need to restructure our banking system," he told lawmakers.</p><p>AIB, which has been ravaged by the global financial crisis, a domestic property market meltdown and a deep recession, is 25 percent owned by the state after a 3.5-billion-euro bailout.</p><p>Cowen said that chairman Dan O'Connor would become executive chairman on a temporary basis to oversee capital raising, AIB's involvement with a government "bad bank" and an EU restructuring plan.</p><p>"Colm Doherty, formerly the managing director of AIB Capital Markets, has been appointed AIB group managing director," AIB said in an official statement on Wednesday.</p><p>"He will take up his new role as group managing director with immediate effect," he said.</p><p>"Mr Doherty will be responsible for the day-to-day running of the bank. He has agreed to take up his new role for a salary of 500,000 euro."</p><p>Group chief executive Eugene Sheehy will retire on November 30, the bank added.</p><p>Michael Somers, head of the state's National Treasury Management Agency that handles Ireland's national debt since 1990, is to become deputy chairman of AIB. He will also chair the AIB board's risk committee.</p><p>Somers, who is a former head of the finance ministry, will replace the current deputy chairman David Pritchard.</p><p>The AIB statement added that Doherty's willingness to take a pay cut reflected "his personal commitment" to the bank and its future.</p><p>AIB had warned earlier Wednesday in a trading update that its bad debt charges were likely to have soared to 5.3 billion euros (7.9 billion dollars) this year.</p><p>The bad debt charges, previously estimated at 4.3 billion euros, were linked to its toxic property loans.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=63687304&bid=informcom" /></div><div id="copyright"><div>

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