Dutch seek to make bank bonuses reclaimable
Senior managers of Dutch banks and insurance companies may soon become liable to pay back "unreasonable" bonuses under two proposed amendments to the law, the government said Friday.
"Bonuses must in future be reclaimable, and assigned bonuses retractable," the finance ministry said in a statement conveying a decision of the weekly cabinet meeting.
"This applies to bonuses that cannot be justified because they are unreasonable or unfair."
Affected would be all bank and insurance company managers whom the ministry described as "daily policy makers".
The change would be achieved through changes to the civil law and the law on financial supervision, said the statement.
Both proposed amendments have to be approved by the Dutch Council of State, which advises the government on legislation, before they can be submitted to parliament.
"Bonus payments have caused much commotion in recent years," said the ministry.
"The criticism was not only against the size of the bonuses, but also the circumstances in which bonuses were awarded at times that companies were battling severe financial problems as a result of the global financial crisis. In the financial sector, in particular, there were excesses."
If all goes according to plan, the new regulations could become effective by January 1, 2011, said the statement.
In September last year, Dutch banks under pressure from the government adopted a code limiting executive bonuses to no more than a year's salary.
© 2010 AFP