SINT MAARTEN/THE NETHERLANDS – Finance minister Wopke Hoekstra is planning to tighten the rules on bankers’ pay in the wake of the row that blew up over ING’s proposal to raise its chief executive’s salary by 50%.
Hoekstra said he was considering three measures aimed at restoring public trust in the banking sector. ING’s board of directors backed down last month on Ralph Hamers’s pay package after facing a backlash from its customers and politicians.
One idea is for bank executives to have to repay part of their salary if the bank is bailed out by the state, so that they take a share of the responsibility. The cabinet is also considering a rule that would force bankers to hold on to any shares they receive for a number of years, to encourage long-term thinking.
Alternatively, the minister could introduce rules that require executive pay decisions to reflect the bank’s position in society. ‘Businesses should be held publicly accountable for this,’ he said in a letter to parliament.
Hoekstra acknowledged that the plans would have to be evaluated to see if they risked breaching the right to property as defined in the European Convention on Human Rights.
On Tuesday the minister criticised insurance firm ASR’s recommended 35% pay increase for its board members. ‘Remarkable and very high, especially in view of the fact that ASR was in the hands of the state until recently,’ Hoekstra said.
ASR was nationalised in 2014 as part of the Dutch share of Fortis bank, at a cost of €3.65 billion. Since it was refloated on the stock exchange the state has earned around €725 million from share transactions. (DutchNews)