Wage gap widens as top CEOs receive hefty bonuses after coronavirus
In 2021, pay for top CEOs increased by 32 percent –– in stark contrast with the 2.2 percent rise in collectively-agreed wages. This put board chairmen's earnings at roughly 40 times that of their average employee, according to De Volkskrant.
This widening of the wage gap can be attributed in part to the economy's unexpectedly swift recovery last year from the coronavirus pandemic. This led 112 large companies to exceed expectations, putting bonuses into the pockets of their CEOs.
According to a survey by De Volkskrant, the top-rewarded CEO in the Netherland was Lucian Grainge, the head of Universal Music Group. Next in line after Grainge were Glenn Fogel of Booking, Bob van Dijk of Prosus and Carlos Tavares of Stellantis, the Amsterdam-based parent company of Peugeot, Citroën and Fiat. Nancy McKinstry of Wolters Kluwer rounds out the top five.
The bonuses were not without controversy. "It is unbelievable to see how the top of the business community has cashed out, while more and more employees barely make it to the end of the month now that wages are far behind inflation," FNV chairman Tuur Elzinga told De Volkskrant.
Eumedion director Rients Abma told De Volkskrant that, because of uncertainty at the beginning of 2021 due to the coronavirus pandemic, criteria for bonuses were set at "a not very challenging level." This year, shareholders will ensure that performance targets are set higher and "will not shy away from voting against rewards."
Employers' association VNO-NCW also observed the growing pay gap. "You would prefer to see that the income differences within a company are not too great and that they do not increase," the association said in a statement. "Especially in this uncertain time when many households and entrepreneurs are having a hard time."
Meanwhile, inflation rose again in the Netherlands in July to 11.6 percent, which is especially reflected in higher food and energy prices. Middle-income families in the Netherlands are struggling to pay their energy bills, with CPB predicting that 1.2 million households would face financial problems if prices stay at their current levels or increase further.