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October 17, 2013 7:48 pm
Rabobank became the first European lender in decades to voluntarily abolish bonuses for its executive board as the co-operative bank bowed to its owners and public opposition to variable pay.
The Dutch group said its move followed a new wage agreement for its 35,000 staff this year which included the abolition of bonuses for all but a small number of traders and IT personnel.
Wout Dekker, chairman, said: “The supervisory board has concluded that variable remuneration for our executive board is no longer compatible with the economic role Rabobank plays in Dutch society.”
The move comes with the Dutch government planning a law that would limit bonuses for bankers to 20 per cent of their salaries, one of the strictest rules on corporate pay in the world. The European Union will introduce a cap of up to two times salary for senior bankers next year.
Rabobank did not receive state aid during the financial crisis, unlike a number of other large Dutch banks such as ING, and was thus not forced by law to stop paying executive bonuses.
The lender, owned by 1.9m retail customers and farmers, already had strict bonus rules in place that limited variable pay for executives to 30 per cent of salary.
It will be one of the very few European banks to have banned bonuses of its own accord. Svenska Handelsbanken, a Swedish lender, abolished variable pay in the early 1970s for most staff including its top executives after a series of scandals.
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