Today the Dutch Lower House of Parliament debated the bill for the Act on the Remuneration Policy of Financial Undertakings (Wet Beloningsbeleid Financiële Ondernemingen). This included a discussion of the increase in base salary of the ABN AMRO Managing Board in 2012.
No more variable remuneration
When the Bonus Prohibition Act took effect in 2012, the managing boards of institutions receiving state support lost the right to receive variable remuneration. This means that, as long as ABN AMRO receives state support, the members of the ABN AMRO Managing Board are not entitled to receive a variable remuneration of 50% of their base salary for performing on target.
The law does, however, include the possibility of awarding partial compensation for the loss of variable remuneration by increasing the base salary by a maximum of 20%. The ABN AMRO Supervisory Board made use of this in 2012: that year, it increased the remuneration of the Managing Board by 16.67%, to apply for as long as ABN AMRO receives state support. At the time, the shareholder consented to this decision.
The members of the Managing Board waived their entitlement to this allowance in 2012 and 2013.
Decision of the Supervisory Board
The Supervisory Board, which determines the remuneration of the Managing Board, believes that the Managing Board should no longer waive its right to receive a portion of the salary to which it is entitled. The Supervisory Board believes in the importance of living up to agreements that have been made and has informed the Managing Board that this partial allowance will be paid as from 2014. The Supervisory Board does not want to give individual Board members the option to waive their entitlement to this allowance. In practice, this means that the members of the Managing Board will receive a 16.67% increase on top of their base salary of EUR 600,000 as from 1 January 2014.
This allowance does not apply to the Chairman of the Managing Board.
ABN AMRO regrets the commotion that has occurred surrounding this issue, but is committed to providing transparency on the decisions taken on the remuneration policy in the past and the manner in which they are now being carried out.
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