Dutch banks cap executive salaries

Dutch banks have signed up to a new code of conduct limiting executive bonuses to 100% of salary.

Once the code comes into force, bankers’ salaries will have to be below the median for similar jobs, bonuses will have to be returned if a bank enters financial difficulty, and redundancy payments will be limited to one year’s salary.

All banks in the Netherlands Bankers Association (NVB) have adopted the voluntary code, which comes into effect from 1 January 2010.

Under the code, all banking executives will have to sign a declaration promising to perform their banking duties with “integrity and care”.

Holland’s finance minister Wouter Bos said the code is a “unique step” towards “restoring faith in the financial sector”.

“The code makes an end to bad practices at banks,” he added.

The NVB said the move “puts Dutch banks ahead in the international discussions over remuneration in the financial sector.”

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