Dutch plan to limit bankers’ bonuses to 20% of salary is delayed

The introduction of a lower cap on bonuses for bankers which should have come into effect on January 1 has been delayed indefinitely, the Volkskrant reports on Monday.

The legislation would have reduced bonuses in the financial sector to 20% of annual salary – a controversial move which goes far beyond the 100% ceiling agreed at a European level.

The Volkskrant reports that extra questions from senators from the ruling VVD and opposition Christian Democrats resulted in the legislation not being discussed in the senate prior to the Christmas holidays because of time constraints.

This means the January 1 deadline was not met. The finance ministry has confirmed the indefinite delay, the paper says.

The Financieele Dagblad, however, says the delay is likely only to be a month or two.

The measure has already been passed in the lower house of parliament with a big majority and the coalition Labour party is convinced the legislation will complete the parliamentary process this year.

‘Banking bonuses will be limited,’ the party’s financial spokesman, Henk Nijboer, is quoted as saying. ‘The sector itself realises the need, albeit reluctantly.’

Higher salaries

ABN Amro had already increased the basic pay of 100 senior executives to compensate them for lower bonuses.

The banking bonus ceiling is the third piece of key government legislation to run into trouble at the end of the year.

Earlier, three Labour senators voted against rules which would give health insurance companies the power to limit patient choice.

The senate did pass legislation putting limits on public sector executive pay just before the break but health minister Edith Schippers and housing minister Stef Blok have both said they did not have enough time to implement the changes this year.

A new senate will be elected later this year.