ABN AMRO decides not to pay any bonuses

News item -

ABN AMRO response to newspaper article on bonuses The Dutch financial daily Het Financieele Dagblad (FD) carried a headline on Thursday, 24 March stating that Dutch finance minister Jan Kees de Jager had stopped the payment of bonuses to the Managing Board of ABN AMRO. The Supervisory Board is in fact responsible for allocating the variable remuneration of the Managing Board. It was the Supervisory Board which decided that the Managing Board was not eligible for any variable bonuses in respect of the 2010 financial year. A key motivation for this was the principle that no profit means no variable remuneration. The suggestion created in the FD article that there was some kind of dispute on this issue with the Ministry of Finance is incorrect.


What is the bank's variable remuneration policy?

ABN AMRO introduced the Banking Code in September 2009. Among other things this Code, to which all Dutch banks have signed up, sets out the remuneration policy arrangements for Managing Boards. The variable remuneration regime for the ABN AMRO Managing Board is in fact stricter than the rules agreed in the Code. The variable remuneration of members of the Managing Board may not exceed 60% of their annual salary. For senior management who are not covered by the Collective Agreement, the maximum variable remuneration is 100% of the annual salary. One third of the variable remuneration is awarded after one year, and two-thirds after three years.

This ensures that only sustained achievements with a long-term effect are rewarded. In addition, members of the Managing Board and managing directors – the management layer immediately below the Managing Board – receive no short-term bonuses if no profits are made. As a result, the members of the Managing Board and the managing directors received no short-term variable remuneration in respect of the 2010 financial year.

Collective Agreement
The remaining staff in the Netherlands (more than 99% of the total Dutch workforce) receive salaries that are fixed in the negotiated Collective Agreement. This salary consists of a fixed portion and a variable performance-related portion. A fixed portion of the salary was sacrificed in exchange for the variable portion in 2005. The performance bonus was introduced to take its place, which is dependent on performance and achievement of targets. The performance bonus amounts to between 0% and 20% of the annual salary and is paid out if staff are performing satisfactorily. The majority of employees will receive a bonus of 9% of their annual salary for the year 2010. Only very few will receive 20%. 
 
International staff
Staff working outside the Netherlands receive a salary that is comparable with salaries paid in the local market where they work. Generally speaking, these employees receive a lower fixed salary and a slightly higher variable portion. The salaries paid to ABN AMRO staff working in other countries are in line with the market and, as in the Netherlands, there are no excesses.

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