Dutch Bank Bonus Caps Scare Brexit Business

Tough rules capping annual bonuses for banking bosses may cost The Netherlands 17,000 jobs and a billion euros in lost revenues after Brexit, a Dutch employers organization warned Monday.

Now the VNO-NCW is calling for the Dutch parliament to reverse a 2015 decision to introduce a cap of 20% of annual pay on the bonuses which can be paid out to top managers in the banking industry, AFP reported.

"Under European regulations it can be 100%," said the organization, adding The Netherlands should "comply with the EU rules and not price itself out of the market".

With many banks now thinking of re-locating out of London as Britain leaves the European Union, Amsterdam has been jockeying to attract new business along with other cities such as Dublin, Paris and Frankfurt. While the Dutch capital has proved attractive for its transport links, good infrastructure and internet and the Dutch people's fluency in English, the rules on bonuses are seen as a disadvantage for those banks thinking of moving.

Failing to attract some of the big banks "due to the strict caps, would, according to conservative estimates, lead to a loss of some one billion euros in tax returns," the VNO-NCW said. "The Netherlands would also miss out on 7,000 direct jobs and another 10,000 indirect jobs," the organization added.

The rules are to be debated on Tuesday in the Dutch lower house of parliament, media reports said, and the VNO-NCW President Hans de Boer said: "Our plea is that we should not be stricter than the EU is. The Dutch parliament has the chance to show this week that foreign banks are welcome in The Netherlands." 

He also revealed in an interview with the Dutch daily De Telegraaf that he has been holding secret talks in past months to try to woo some big commercial banks to the country. Although he did not name them, the paper speculated that US banking giant JP Morgan, Switzerland’s UBS and Britain's RBS were seriously considering moving branches to Amsterdam if the legislation is changed.