ING CEO’s pay proposal opens a can of worms

ING has taken a lot of flak for proposing to increase its CEO Ralph Hamers’ salary by 50% to €3m in 2018. Some observers say the figure is peanuts to what a bank CEO could command on Wall Street or London. Others are horrified at what they see as pure excess in a Calvinistic country.

Finance minister Wopke Hoekstra is ‘not amused,’ notes Algemeen Dagblad. In parliament MPs from GroenLinks and D66 have called for a hearing in which Jeroen van der Veer, ex-CEO at Shell and chairman of ING’s supervisory board, would explain his recommendation. Only right-wing Forum voor Democatie refused to support the motion.

To say the very least Ralph Hamers’ proposed remuneration package has opened a dialogue. ING maintains that Hamers has been underpaid for years in comparison with bank bosses abroad.




If approved by shareholders, Hamers’ pay package will increase to more than €3m up from €2m at present.  But Hamers’s pay  is ranked only 48th in the list of the 50 largest companies in the eurozone. He will move up to 44th place if the rise goes through, ING claims.

Consider then New York banker Jamie Dimon. He is one of the few bank chief executives to become a billionaire, thanks in part to a $485m stake in JPMorgan Chase where he is CEO. Dimon earned $28.2m in 2016.

Banking chiefs

What are other banking chiefs in the Netherlands earning? Online news service Nu.nl  took a look at what is known so far.

Rabobank says the pay package of its CEO Wiebe Draaijer will be unchanged from the €980,000 he took home in 2016. Although he receives no bonuses, Draaijer’s pension package increases his earnings to just over €1.2m.

ABN Amro CEO Gerrit Zalm was paid €775,000 in 2016, with his pension bringing the total to nearly €1.1m. Zalm’s successor Kees van Dijkhuizen, who took over earlier this year, will earn €713,000 in 2017. He has no right to a bonus.

So far there has been no mass exodus of ING clients disgruntled at Hamers’ pay rise, somewhat to the surprise of the Financieele Dagblad.

Customers

‘The uproar in The Hague and on social media about the proposed pay rise has not led to a large number of people leaving ING. Despite the fact that many people have threatened to quit or to take other measures, nothing untoward has occurred,’ an ING spokesman told the FD.

The spokesman admitted that there has been considerably more contact with the bank through chat, social media and the phone. ‘Some of the messages are more emotional, but everyone reacted in their own way,’ he said.

The ‘Hamers effect’ has been noted at the smaller banks however, the FD said. Without supplying concrete numbers, a Volksbank spokesman said contact with its ASN subsidiary has increased 14-fold over a normal Thursday. At SNS, another Volksbank unit, the numbers merely doubled.

Green bank Triodos said contact with customers was well up and the number of new clients had doubled compared to other weeks.