Two years ago, politicians couldn’t praise Jan Hommen enough: the ING boss announced that until further notice he would work for nothing for the ailing insurance bank. Now the yearly figures reveal that in 2010 Hommen received a regular salary of €1.3 million topped up by a bonus of 1.25m. The left-wing opposition is not pleased, writes the Volkskrant.
Have Hommen and his bankers really taken leave of their senses, or is their remuneration in line with normal practice? According to the bankers’ code Hommen’s salary is not excessive. In the wake of the credit crisis and pressed by former finance minister Wouter Bos banks decided that bonuses shouldn’t exceed a year’s salary.
ING kept its promise: Hommen’s bonus is 92 % of his salary. Moreover, part of the money won’t be paid out to him until much later, another rule set out in the code.
Compared to other Dutch firms Hommen and his colleagues cannot not even be considered top earners. At ten of the AEX firms salaries are higher, according to the year-end figures.
AkzoNobel CAO Hans Weijers earned almost € 5 million last year, almost double of what Hommen received. ASML, DSM and Fugro, valued less by investors, all pay fat cat salaries.
Unlike ING, these companies have not received state support. It could have been a reason for ING to tighten its purse strings. On the other hand, other companies have profited from measures like cutting back on working time and investments in infrastructure.
Compared to foreign bankers Hommen’s salary is very small potatoes. Goldman Sachs’ Lloyd Blankfein and JP Morgan’s Jamie Diman netted 9 and 12.8 million respectively. Blankfein’s excuse is that his bank, unlike ING, has paid back the state loan.
But there are others who haven’t. Stephen Hester of the party nationalised RBS, for example, is still paid more than his Dutch counterpart.
But that is not what is getting up the noses of politicians, unions and members of the public. Salaries above a million have always aroused anger, not just in the Netherlands but in Britain and the United States.
On top of that, bankers have not been at the receiving end of the crisis. Small businesses, home owners and temps have been footing that particular bill. In 2008 and 2009 bankers did renounce the greater part of their bonuses but in the meantime things have gone back to the way they were. Politicians are particularly irked by the fact that some below board level bankers are getting more than a years’ salary in bonuses.
Meanwhile clients are criticising the banks’ level of service. Home buyers have less to spend because banks are reluctant when it comes to mortgages, often rightly so. Interest is low and the victims of the so-called ‘profiteering policies’ are far from happy. Hiking up bankers’ bonuses, understandably, is not going to make things better.
Ironically enough it was former union chairman and PvdA member Lodewijk de Waal who, as ING government commissioner, engineered the financial settlement with Hommen. This he did according to the code described above.
De Waal said in an interview with the Volkskrant at the time: ‘Even I cannot get away from the workings of capitalism. I live in hope that they will change one day. But the SP will always think it’s too much and top managers will always think it’s too little. I am stumbling in the area in between.’
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