Dutch finance minister Jeroen Dijsselbloem is to stick to his plan to limit financial services sector bonuses for at 20% of basic salary despite criticism from banks.

‘Perverse incentives such as high compensation and bonuses are globally seen as one of the causes of the financial crisis,’ Dijsselbloem said in an e-mailed statement, news agency Bloomberg reported.

‘For everyone working in the Dutch financial industry, possible bonuses will be capped at 20% of fixed pay as of 2015.’

The Dutch government, a coalition of the right wing VVD Liberals and the Labour party (PvdA) said in their coalition agreement they would limit bonuses to 20%. Brussels is planning to ban bonuses of more than one times fixed pay from 2015 for most senior bankers.

Opposition

On Thursday it emerged the Council of State – the government’s most senior advisory body – opposes the 20% ceiling.

According to the Telegraaf, the Council of State sees numerous legal problems with Dijsselbloems plans, both in the Netherlands and in Brussels. In addition, economic affairs minister Henk Kamp thinks the plan will hurt Amsterdam’s financial services industry, the Telegraaf said.

The legislation also includes a ban on guaranteed bonuses and limits golden handshakes to a year’s salary.

Compensation

According to website Z24, Dijsselbloem has softened his original plans slightly. For example, banks will be able to increase bankers fixed salaries to compensate for lower bonuses, the website said. 

The Dutch banking association also opposes the change, saying banks are already making progress on reducing excessive pay deals.

A specific Dutch remuneration policy ‘will deviate sharply from European policy and we don’t need that,’ chairman Chris Buijink said.