AMSTERDAM, Feb 6 (Reuters) - The Netherlands will impose a cap on bankers’ bonuses at 20 percent of their annual salary from Saturday after the upper house of parliament passed a law on the move, the government said on Friday.
The European Union has capped bankers’ bonuses at 100 percent of annual salary, but the Netherlands opted to impose a much lower limit.
“This law will put an end to golden handshakes of more than a year’s pay and guaranteed bonuses in the financial sector,” Dutch Finance Minister Jeroen Dijsselbloem said in a statement. “Excessive bonuses and severance pay are a thing of the past.”
The law also makes it possible to claw back bonuses that were inappropriate, he said.
Severance pay for managers will be capped at a maximum of one year’s annual salary, while restrictions on pay at banks receiving state aid will remain in place until a company is no longer state-owned.
Several major Dutch banks fear the tougher rules will undercut their ability to compete with foreign banks and upped the pay of their top managers by 20 percent in anticipation of the law. (Reporting By Anthony Deutsch; Editing by Hugh Lawson)