The cabinet is to press ahead with plans to cut back excessive executive pay despite a government committee’s recommendations that top salaries should be determined by self-regulation.
Finance minister Wouter Bos said on Wednesday evening that he too would like to leave senior salaries up to the market but that existing agreements are often ignored.
Bos was speaking after the presentation of the long-awaited report by the Frijns committee on corporate governance.
Committee chairman Jean Frijns said he is against bringing in legislation to tackle top people’s pay because it would be too easy to avoid the rules and would damage the investment climate.
Frijns said that self-regulation is the best answer to reducing excessive financial rewards for boardroom staff although he admitted it would take a lot of self discipline from bourse-listed companies.
The committee wants to strengthen the role of supervisory boards in determining bonuses.
Bos said he welcomes a stronger role for supervisory boards which would operate as the ‘gatekeeper in the income debate’.
Unions however dismissed the idea of self regulation. ‘When it comes to top salaries, self regulation is just not enough,’ FNV deputy chairman Peter Gortzak told the Financieele Dagblad on Thursday.
The shareholders lobby group VEB said the committee has not got far enough. ‘Relatively large bonuses are being paid for a poor performance,’ a spokesman said.
And employers association VNO-NCW warned politicians against taking ‘populist’ measures.
The committee’s research showed that Dutch executive salaries are in line with those elsewhere in Europe.
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