AMSTERDAM, Dec 18 (Reuters) - The Dutch government on Tuesday unveiled new plans to tighten up rules covering bankers’ pay, including restrictions on selling shares awarded as part of compensation packages.
The measures follow public and political outrage over the Dutch bank ING’s proposal earlier this year for a 50 percent pay rise for CEO Ralph Hamers, which the bank then scrapped.
ING was bailed out by taxpayers during the 2008 financial crisis and in September this year agreed to pay a record $900 million fine for failing to spot money laundering through its accounts.
“This erodes support (for banks) in society, at a time when the financial sector needs to regain trust,” Finance Minister Wopke Hoekstra said in an outline of his plans.
The Netherlands in 2015 already introduced a bonus cap for financial sector employees, limiting variable pay to a maximum of 20 percent of base salary.
The government’s latest plan aims to limit possible exceptions to this rule, and to force banks, insurers and other financial service providers to publicly explain the level of their managers’ pay.
All financial sector employees will have to hold on to company shares received as part of their compensation for at least five years to limit the focus on short term gains.
In the future, board members of banks that need state aid to survive should also be made to pay back part of their salary, the government said. It has asked legal advice on this proposal and expects an answer in the first quarter of next year.
During the 2008 financial crisis, the Dutch government nationalised ABN Amro, while offering billion-dollar lifelines to ING, insurer Aegon and other financial companies.
ABN was re-privatised in 2015, but the state still holds a 56 percent stake. The state also owns all of smaller Volksbank, which was nationalised in 2013.
Reporting by Bart Meijer. Editing by Jane Merriman