New rules proposed by the European Commission could mean an end to the bonus cap for hundreds of Dutch investment firms, though the cap may still apply to companies large enough to be considered systematically important, such as banks and insurers, BNR reports.
While many claim that the Netherlands' strict banker bonus cap is deterring international banks from settling in Amsterdam after the Brexit, the Dutch capital does seem to be popular within another branch in the financial sector - flash traders.
At least five companies involved in this type of stock trade already settled in Amsterdam or are planning to do so soon, according to the Financieele Dagblad on Tuesday. The newspaper calls it "the first success for the lobby that wants to attract financial companies from the City to Amsterdam".
On Tuesday a majority in the Tweede Kamer voted against a proposal to keep the Netherlands' strict cap on bankers' bonuses in place. While the parliamentary vote is not binding, it does suggest that if the new government decides to scrap te cap, or make the rules around it more lenient, the decision will be met with approval.
Should the Netherlands decide to stick to its low banker's bonus limit, the country could lose out on 17 thousand extra jobs and 1 billion euros in income and corporation tax, says employers' organization VNO-NCW. According to the organization, dozens of small financial institutions and at least three major international banks would move from London to the Netherlands after the Brexit, if the bonus limit was not an obstacle, NU.nl reports.
Exactly which financial institutions are involved, the VNO-NCW did not say.
Many banks and financial institutions moving to Europe after the Brexit, are shunning Amsterdam due to the Netherlands' cap on bonuses. While the rest of the European Union capped bonuses at 100 percent of the fixed salary, the Netherlands' cap is 20 percent of the fixed salary. The banks fear losing talent to the competition, being forced to pay irresponsibly high salaries to keep employees and do not feel welcome in the Netherlands, Financieele Dagblad reports after talking to a number of companies assisting banks in their move to the EU mainland.
Amsterdam is in talks with numerous financial firms currently based in London about relocating to the Netherlands due to Britain's decision to leave the European Union, deputy mayor Kasja Ollongren confirmed, according to The Guardian. "They [financial institutions] are all preparing themselves. They don't know exactly what they have to prepare for because the situation is unclear and it will take some time until it is more clear. Financials and others are looking at possibilities and very often Amsterdam is on the shortlist", Ollongren said, according to the newspaper.
Minister Jeroen Dijsselbloem of Finance wants to cap all bonuses for company directors at no more than 20 percent of their annual salary, he said in the Volkskrant on Thursday. He believes this is the only way to restore the balance between executives and ordinary employees.
The strict bonus policy in the Netherlands' financial sector, which includes a limit on bonuses, seems to be effective, according to the first assessment of the policy. So far there is no negative impact on the Dutch economy, business climate and competitiveness, Minister Jeroen Dijsselbloem of Finance wrote to parliament on Tuesday
Finance Minister Jeroen Dijsselbloem approved the controversial ABN Amro executive board pay raise and promised to defend it publicly in spring 2014, according to a memo ABN Amro put together in August 2014, and acquired by NRC.
The ABN Amro has heightened the steady salary of its 100 highest managers under the board of directors by 20 percent at the start if this year. The bank announced Wednesday that the variable bonus has been lowered from 100 percent to 20 percent.