Wednesday, 27 November 2013 - 04:34
Bankers' bonuses capped at 20% in 2015
If it is up to the Minister of Finance, bonuses in the financial sector will be limited to up to 20 percent of the fixed salary, starting 2015. Minister of Finance, Jeroen Dijsselbloem, wrote this in a letter to Parliament, Tuesday afternoon.In his letter, Dijsselbloem invited the financial sector to respond to his bill. This new law should not only apply to everyone who works in the financial sector (banks and insurers) in the Netherlands, but also to staff, working in the Netherlands, for foreign financial institutions. Minister of Finance Jeroen Dijsselbloem - wikipedia "Perverse compensation incentives are seen as one of the causes of the financial crisis," writes Dijsselbloem, who goes well beyond new European directives with his proposal. Those allow for a bonus of up to one hundred percent of the fixed salary for workers within Europe, and two hundred percent for employees outside Europe. Golden handshakes will be limited to a maximum of one year's salary and, moreover, will be subject to strict conditions, according to the bill. Severance pay will not be possible if a subject voluntarily leaves or demonstrably failed. Guaranteed bonuses, where no performance is required, will be banned. The possibilities to recover bonuses will be expanded. The Dutch Banking Association finds new legislation unnecessary, as evidenced from their response to news agency Novum. The association points out that the sector has already considerably reduced the variable rewards in recent years. Only two percent of the ninety thousand bank employees in the Netherlands receives a variable payment of twenty percent or more. These mainly involve specialists who are so scarce that banks have to pay such a compensation. In short, the banks see little merit in the plan of the Minister.