Focus on Irish bankers’ pay as Dutch get tough

Focus on Irish bankers’ pay as Dutch get tough

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

More on this topic

Consumer spending in June fell to lowest level in five yearsConsumer spending in June fell to lowest level in five years

Ireland's per capita debt level stands at €44,365Ireland's per capita debt level stands at €44,365

Irish economy grew by 8.2% last year, figures showIrish economy grew by 8.2% last year, figures show

Sun still shining on Irish economy, but Brexit storm clouds are gathering on horizonSun still shining on Irish economy, but Brexit storm clouds are gathering on horizon

More in this Section

Performance of Irish bank shares to face heavy scrutiny in coming weeksPerformance of Irish bank shares to face heavy scrutiny in coming weeks

Brosnan bloodstock posts loss of €2m due to heavy cost provisions Brosnan bloodstock posts loss of €2m due to heavy cost provisions

Liberty London sold to new owners in €334m dealLiberty London sold to new owners in €334m deal

Supermarkets cash in as TV and jewellery shops fail to shine in early summer sales, says major surveySupermarkets cash in as TV and jewellery shops fail to shine in early summer sales, says major survey


Lifestyle

These handy product edits are so useful for travelling, says Katie Wright.Palettes pack a punch: The travel must have

More From The Irish Examiner