Dividend payments to employees of ABN AMRO Participaties

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Private equity investment deals typically involve individual employees taking a stake in the funds invested in. If the investment pays off, this may result in dividend being paid out to employees.

This also goes for employees of ABN AMRO Participaties (AAP), ABN AMRO’s private equity subsidiary. A total of 16 former and current employees have individual stakes in one or more funds in AAP's investment portfolio. And now these employees are benefiting from their holdings, thanks to AAP’s successful investments and the buoyant market. Although the payments they receive qualify as dividend and are compliant with regulations and legislation, this practice is out of step with the spirit of ABN AMRO’s remuneration policy.

ABN AMRO Participaties is scheduled to be spun off in the near future. In the bank’s refreshed strategy, the focus is on traditional banking relationships, and this does not sit comfortably with holding majority stakes as a private equity investor. Current best practice in the market is to place such activities at arm’s length. The discrepancy between the earnings of private equity managers and the bank’s reward policy have also played a role in the decision to spin off ABN AMRO Participaties. For further information about the AAP spinoff, see our press release.

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