The bonus legislation that the government imposes on the financial sector, ING Bank ING Groep NV 13.53 + 0.07% 0.01 + at a disadvantage compared to competitors and is therefore not tenable for the group.
writes ING of the Remuneration Committee in the Annual Report. ING is the first Dutch bank to publish the report and it takes a position on the new legislation. The law, which bankers bonuses decreases to 20% of the fixed salary is in force since February 7.
ING raises the fixed salary for the top of the bank to partially offset the impact of the bonus ceiling. For CEO Ralph Hamers comes down to an increase of almost 30%.
Backlog
Through the bonus ceiling comes ING stand at a disadvantage with competitors, writes the Remuneration Committee. At the proposal of the committee receives CEO Ralph Hamers this year up to € 1.891 million reward if he gets the targets. This includes an increased salary of € 1.630 million and a bonus of 16% of the fixed salary. In this way, the remuneration committee has 4% extra slack if the bank is performing better than expected. The bonus will be paid in shares.
Ceo’s that drive a similar organization, get as ING totaling € 4.580 million (median) . Even with CFOs and chief risk officers’ the difference is huge: € 1.369 million at ING versus € 2.185 million at the other companies that are listed on the Euro Stoxx 50, a group to which the bank compares
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Because of these differences, ING will be placed at the bottom of the rankings. ING can not afford this situation in the long term, because it makes it difficult to attract ‘qualified and experienced’ top executives. The situation, according to the commission is not tenable, especially because the bank operates internationally.
CEO Ralph Hamers, in 2014 a total of € 1.270 million received in salary. The comparison with 2013 is flawed because it only since October 2013, the chief executive of ING. CFO Patrick Flynn received € 772,000, like his colleague Wilfred Nagel, who is responsible for the risk management of ING (Cro).
Because the bank in 2008, has received state, the top of the bank since that time had no bonus. This year should do that, because the aid is repaid in November last year. According to the old remuneration policy, which dates from 2010, Hammers could up to 80% to 100% of base salary as a bonus get. This means that the maximum total remuneration amounts to € 2,286 million. In order to come close to this amount, the fixed salary of the directors is increased. The salary of the CEO is of € 1.270 million to € 1.630 million, an increase of 28.3%. The CRO and CFO goes up to € 280,000 (31.1%) to € 1.180 million.
The salary increase is no unique measure . Last year, ABN Amro was in the news when it was announced that the fixed salaries of the 104 top managers increased by 20%. According to CEO Gerrit Zalm was the increase necessary to retain talent, he said in an interview with the FD. Even this increase was a reaction of the forthcoming legislation. Salmon: “You have to reward competitive, otherwise hollow you out of your bank. Inevitably
Response
De union, the Union is not happy with the salary increase of the directors of the bank. “The salary increase in the top ING had better invest in a good work-to work programs for the employees of ING. It is ironic to discover that the income of the top now has increased while the floor gets into more uncertainty, “said Chairman Reinier Castelein in a statement.
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