On 5 July 2019, the Act on the further remuneration measures for the financial sector (Wet nadere beloningsmaatregelen financiële sector, the Act) was published for public consultation. The Act will, among other things, propose the following amendments to the current remuneration rules:
- Introduction of a statutory retention period for certain financial instruments: directors and employees of financial undertakings will be required to retain financial instruments (e.g. shares) which are part of fixed remuneration for a five year period.
- Social accountability in remuneration policy: the remuneration policy of financial undertakings will need to address how its remuneration policy relates to its function in the sector (and how this was formed) and its position in society.
- The exemption from the 20% bonus cap for employees that are not subject to a collective labour agreement (collectieve arbeidsovereenkomst): the scope of this exemption will be limited. The exemption will only be available under exceptional circumstances, and in any case not for persons performing an internal control function, or persons directly involved in performing financial services to consumers.
- The exemption from the 20% bonus cap for investment firms that exclusively deal on own account: the exemption will be applicable to investment firms that exclusively deal on own account without any external clients. The requirements to qualify as “local firm” will be removed as a result of a policy change by the Dutch Central Bank (De Nederlandsche Bank, DNB).
In 2018, a public consultation was launched on three potential remuneration restrictions (please see our previous blog post for more details). As a result of the responses to this consultation, it has been decided to leave out the restriction on clawing back part of the fixed remuneration of directors when state aid (staatssteun) is provided to banks (or insurers).
The consultation will end on 30 August 2019.
View the Act (Dutch only), 5 July 2019.