Dijsselbloem under scrutiny from Dutch lawmakers on ABN pay
After months of pressuring Greek politicians, Dutch Finance Minister Jeroen Dijsselbloem was under scrutiny himself Thursday over his handling of state-owned lender ABN Amro Group NV.
Dutch parliament is debating the matter after lawmakers’ outrage at pay rises awarded to ABN Amro executives forced the government to delay the bank’s initial public offering. The bank’s management said Dijsselbloem had promised to defend the increases.
“Why didn’t the minister immediately respond as soon as he learned about the salary increase at ABN Amro if he really thought it was damaging? What’s the value of the minister’s words?” Tony van Dijck, a member of Geert Wilders’ Freedom Party, said in parliament.
Dijsselbloem told ABN Amro executives that the pay increases were “unwise,” its chairman, Rik van Slingelandt, said in an earlier hearing this week in parliament, before charging that the minister had said he would defend the increases as being legal.
The finance minister has had to juggle questions about the control of corruption risks at ABN Amro while leading euro-area negotiations with Greece over its bailout program in his role as the Eurogroup chairman. Lawmakers are concerned the state will lose billions of euros from its 22 billion-euro ($24 billion) bailout of the lender on the cusp of the financial crisis.
Parliament was caught by surprise last month when ABN Amro’s annual report revealed six board members were paid an additional allowance of 100,000 euros in 2014. Several lawmakers have said Dijsselbloem never informed them of the pay hike and have criticized him for not taking into account the reaction of Dutch voters. They were particularly outraged as the bank simultaneously let workers go and froze salaries of other employees.
Delayed IPO
Two days after the IPO was put on ice, the executives handed back their pay increase.
“The bank didn’t notice it has a certain responsibility to the society being a state-owned bank,” said Harald Benink, a banking and finance professor at Tilburg University in the Netherlands. “If Dijsselbloem really didn’t want the salaries to increase, he could have stopped it.”
The Dutch government was forced to nationalize parts of the bank after a 71.9 billion-euro takeover of the business by three lenders ended with the company’s breakup. The IPO will probably be the biggest in Dutch history when it occurs.
Dijsselbloem introduced the European Union’s toughest caps on bonuses in the Dutch financial industry in 2013. The law limiting bonuses at banks and insurers to 20 percent of fixed salaries came into force last year. European Union rules ban bonuses exceeding twice fixed pay.
[Bloomberg]
