Saturday 26 September 2020

Dutch central bank warns banks about major pay hikes for executives

Klaas Knot. Photo: De Nederlandsche Bank

Banks should be aware of the signals they are sending out when giving major salary hikes to top executives, according to Dutch central bank president Klaas Knot.

Speaking to the Volkskrant following the publication of the central bank’s annual report on Thursday, Knot said that major wage rises ‘touch an open wound’ in society.

Knot was reacting to the row over the proposed 50% hike in the salary package paid to ING chief executive Ralph Hamers which was later withdrawn after parliament threatened to intervene.

Knot said the outcry over the proposal was ‘understandable’ given the economic crisis of 10 years ago.

‘Supervisory boards should take this into account when considering the optimal salary for bank executives,’ Knot told the Volkskrant. Although banks have recovered from the crisis, they may at some point need state support again, he said.

‘This means financial institutions can never be 100% private,’ he said.

On Wednesday, ING supervisory board chairman Jeroen van der Veer, defended the proposed salary increase when tackled by MPs.

Read Knot’s opening statement in English

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