Bankers fail to convince MPs about need to increase pay

abn amroBankers and financial sector experts answered MPs questions about salaries at a meeting of parliament’s finance committee on Tuesday evening.

The aim was to explore the reasons why banks are awarding large pay rises to senior board members at a time when jobs are being cut.

‘The parliamentary hearing about executive pay in the financial sector turned into a confrontation between MPs and executives,’ wrote public broadcaster Nos.

One of the main protagonists in the debate and present to defend the controversial ABN Amro pay hike was supervisory board member Rik van Slingelandt.

Facing an audience of at times ‘astonished’ MPs, Van Slingelandt said the pay hike of €100,000 was ‘morally defensible’. Nos quotes him as saying that ‘we have a position to defend on the labour market. We have to show we are good employers.’

Van Slingelandt’s defence tallied with that of Aegon CEO Leo van Wijk. ‘From a Dutch point of view the remuneration of executives can seem excessive. But our American shareholders say, you should pay these people more because you’re way under the international norm,’ Nos quotes Van Wijk as saying.

Repulsive

GroenLinks MP Jesse Klaver called the argument that good people cost money ‘repulsive’.

‘I don’t know what planet you are on,’ Nos quotes him as saying. Klaver pointed out that three banks were bailed out with public money effectively turning the executives into civil servants.

The NRC’s political commentator Philip de Witt Wijnen sums up what many may have been thinking: ‘Van Slingelandt deplores the commotion but not the decision to hand out bonuses. I suspect that the majority of MPs expected a little more contrition.’

Competition

In the Volkskrant, Christen Unie MP Carola van Schouten is quoted as saying that ‘bankers and politicians are in a state of total non-communication. We are discussing salaries of two million euros plus, or a hike of €100,000. It was the Dutch who salvaged the banks and insurers. The subsequent argument of having to compete in an international market then seems incongruous.’

Former ABN Amro human resources manager turned VU university lecturer Kilian Wawoe told the panel the fear of being uncompetitive is exaggerated. Money, he said, does not feature in the top three reasons why senior bankers leave.

And in the past few years, only two board members have gone to London and New York. Compared with the rest of the corporate sector, this is a very low number, he is quoted as saying by Elsevier.

Current affairs television programme Pauw invited young, aspiring bankers to watch the debate. The students did not see anything wrong in either the ABN Amro pay hike or in going abroad to pocket a bigger salary. On Twitter one viewer wrote: ‘My God, these students are even worse than the present lot!’

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