Freeze CEOs share packages in takeover
17 October 2007, THE HAGUE – Parliament wants to freeze the value of shares and future contracts owned by CEOs when their companies are becoming entangled in a takeover battle. This should prevent conflicts of financial interest of CEOs during takeover proceedings.
17 October 2007
THE HAGUE – Parliament wants to freeze the value of shares and future contracts owned by CEOs when their companies are becoming entangled in a takeover battle. This should prevent conflicts of financial interest of CEOs during takeover proceedings.
The proposal presented by MP Paul Tang (PvdA) will be supported by the CDA and the VVD. Finance Minister Wouter Bos is not opposed to the idea either. This emerged on Wednesday during an emergency debate in parliament on the profit of EUR 26 million which ABN Amro's chairman of the managing board Rijkman Groenink is due to receive as a result of the bank's takeover.
A unanimous parliament expressed incomprehension about Groenink’s bonus, although the CDA declined to comment on this specific case. "I find it incomprehensible that employees have to fear for their jobs, while the top is given millions of euros," MP Frans Weekers (VVD) said. The financial spokespersons for the PvdA and GroenLinks were more critical. Tang (PvdA) referred to "failing, ego-tripping chairmen and passive supervisory board members".
Bos was understanding of the dissatisfaction, which is the result of a mix of absurdly high sums, job losses and mixed feelings about the performance of CEOs. He was however critical of the factions that openly expressed doubts about Groenink’s integrity, because the top man’s personal gain would have played a role in the takeover of ABN Amro. "There is no reason to doubt his integrity," a spokesperson for Groenink said after the debate.
The EUR 26 million parliament was discussing, consists of options and shares, which Groenink had acquired in the past. Groenink will need to cash these assets as the bank will be sold and the shares will no longer be traded at the stock market. In addition, Groenink will receive an exit bonus, the height of which has not yet been determined.
During the debate Minister Bos repeated that he would look into measures to put an end to the exorbitant remunerations, including maximum takeover premiums and "wrong incentives" for chairmen.
[Copyright Expatica News + ANP 2007]
Subject: Dutch news