Finance minister, banks reach bonus deal

Finance minister Wouter Bos has reached a ‘gentlemen’s agreement’ with banks and insurance companies about moderating bonuses in an effort to restore public faith in the financial services sector.

MPs had urged Bos to take action on excessive bonuses paid out by banks which have had government bail-outs.
In particular they were angered at last week’s news that the new ING CFO was being given 100,000 shares as a golden hello.
The deal means that banks are committed to pursuing a ‘sustainable and moderate reward policy’, news agency ANP reports.
Bankers have also agreed to do away with a bonus system which encourages bankers to take ‘irresponsible risks focused on the short term and shareholder value’, ANP said.
Banks and insurance companies have also agreed that pay rises for executives will not exceed those paid to the rest of the staff.
Companies which have had government bail-outs have also committed themselves to being ‘extremely reticent’ with paying performance-related bonuses and that golden handshakes should be limited to one year’s salary.
If banks had not agreed to take action, Bos had threatened to come with legal steps.
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