Dutch government caps performance-related bonuses
Move follows outrage over €33 million bonuses for Rabobank subsidiary executives
Dutch finance minister Jeroen Dijsselbloem: said Robeco bonuses were “not in the spirit of the times”. Photograph: Reuters/Francois Lenoir
The Dutch government is to introduce tough legislation which will cap performance-related bonuses in the financial services sector at 20 per cent, despite opposition from powerful industry leaders.
Finance minister Jeroen Dijsselbloem – also chairman of the Eurogroup of euro zone finance ministers – revealed at the weekend that the cap would be included in draft legislation on remuneration policy, which he will present to parliament after the summer recess.
New laws to rein in the wider banking industry were promised when prime minister Mark Rutte’s liberal VVD party formed a new coalition with the Labour Party last October. It’s now believed these laws could include a controversial tax on all financial transactions as well as the bonus cap.
The government’s plans were given new impetus by public outrage earlier this month when it was revealed that 53 executives of asset manager Robeco, a subsidiary of Rabobank, will share bonuses of €33 million as a result of its takeover by Japanese competitor Orix.
The uproar became greater when it emerged that the central bank had given the green light for the takeover “as a one-off and without prejudice” despite acknowledging that the package was in direct conflict with the bank’s code of conduct.
The usually reserved Mr Dijsselbloem described the central bank’s approval of the deal as “dubious” and the bonuses as “excessive”, and “not in the spirit of the times”, saying “I’m not convinced such bonuses are necessary to retain key staff in these times of economic crisis”.
But while Mr Dijsselbloem may be in the unusual position for a finance minister of having public opinion behind him, there has been a furious reaction from the financial services industry – which warns the movies will cost jobs.
Floris Deckers, chief executive of Van Lanschot Bankers, said a transaction tax would be “a stupid move”, while Robin Fransman, deputy chief executive of the Holland Financial Centre forecast that “thousands of jobs would be lost”.