The Dutch aren’t done with regulating banker pay in a country that already has one of the strictest remuneration laws in the EU. In a letter to parliament, Finance Minister Wopke Hoekstra proposed making bankers hold on to shares and similar financial instruments in their fixed salary for five years.
They would also be compelled to explain how their pay relates to their role in society.
Minister Hoekstra also said he is investigating the legality of possibly clawing back part of a bank executive’s salary when a lender receives state aid.
The move may come too late for an Irish report commissioned by the Finance Minister into the pay at bailed-out Irish banks. The Department said last week the report was being drafted and would be ready in the new year.
It was commissioned after Minister Donohoe vetoed a bid in April by AIB to usher in a long-term incentive plan for top executives. The bank had argued the pay cap of €500,000 for the bank was restricting it recruiting top talent.
The views of new AIB CEO designate Colin Hunt on pay are not known. Shares in AIB have slumped 36% this year, which could mean that its executives would gain from any new scheme pegged at current levels should the shares rally in the coming years.
In the Netherlands, existing clawback legislation is limited to the variable part of a pay package. They limited bonuses in the banking sector to 20% of base salary, much stricter than the European norm of 100%.
Public anger over bankers was on display in the Netherlands this year after the country’s largest bank, ING proposed raising the pay of its CEO by about half to €3m.
- Bloomberg and Irish Examiner