AMSTERDAM (Reuters) - Dutch lender ING (INGA.AS) outraged politicians on all sides of the political spectrum on Thursday with a proposal to increase the pay of Chief Executive Ralph Hamers by 50 percent.
Finance minister Wopke Hoekstra said the increase was “excessive”, while members of parliament called for a public hearing to hold ING Chairman Jeroen van der Veer to account.
Parties representing 99 percent of the seats in parliament supported a motion condemning the pay rise, as they said it did not help to rebuild confidence in the financial sector.
51-year old Hamers, who has led ING since October 2013, will receive the extra pay in the form of ING shares worth 50 percent of his base salary of 1.75 million euros ($2.17 million). He received a total of almost 2 million euros in 2017.
Dutch politicians have tried to limit pay for bank executives since the financial crisis, including by limiting performance bonuses to a maximum of 20 percent of base salaries.
But their influence over ING’s proposal seems limited, as the pay rise comes in the form of a guaranteed shares reward, independent of the bank’s performance.
Labor union CNV said ING’s willingness to pay Hamers 50 percent more was “absurd”, as the bank was only offering its other employees a general pay rise of 1.7 percent this year.
Van der Veer, a former CEO at Shell (RDSa.L), said Hamers had been underpaid for years.
“We have postponed this decision time and again, but decided to make a big step now”, he said in an interview with financial daily Het Financieele Dagblad.
Under Hamers, ING has made a push into digitalization and increased its net profit to 4.9 billion euros last year from 1.25 billion in 2014.
Its share price has risen 66 percent since Hamers took the reins, compared with a 39 percent overall gain for the Amsterdam blue chip AEX index .AEX.
“Hamers has built a clear track record in the past few years and we want him to continue the transformation of the bank,” Van der Veer said.
ING spokesman Raymond Vermeulen declined to say whether the timing of the pay rise had anything to do with Hamers receiving job offers from other companies.
ING said the increased pay would rank the bank 44th among Euro Stoxx 50 companies in terms of CEO pay.
Hamers’ base salary will be 2 percent higher than last year, and he will be required to hold on to the shares for at least 5 years. He can raise his total pay to 3.05 million euros by meeting certain targets.
Shareholders will vote on the supervisory board’s proposal at their annual meeting on April 23.
Reporting by Bart Meijer; Editing by Jason Neely and Mark Potter