1. Bonus Prohibition Bill - Update
On Tuesday 14 February 2012, the Lower House (Tweede Kamer) adopted the Bill on the limitation of liability of the DNB and the AFM and the introduction of a bonus prohibition for State supported institutions, including several amendments.
The modified Bill in which the adopted amendments have been incorporated will now be sent to the Senate (Eerste Kamer). The date on which the Bill will enter into force is not yet known, but this is expected to happen shortly.
Key changes to the Bill
On 6 and 7 February 2012, six amendments have been discussed in the Lower House. As a result of the adoption of the amendments the Bill now has a wider scope. Please click here to view the modified Bill including the explanatory notes to the amendments.
Managing directors or policymakers
One amendment extended the scope of the Bill to persons who determine the day-to-day policy (dagelijks beleidsbepalers) of the financial institution instead of limiting it to formal board members (bestuurders) only. This amendment however only applies to financial institutions that received or will receive state support after 7 February 2012. For financial institutions that received state support prior to this date the prohibition only applies to 'managing directors' instead of 'policy makers'.
The scope of the bonus prohibition is also extended to financial institutions that do not receive state support within the meaning of section 107 of the EU Treaty, but which are directly or indirectly held by the Dutch State.
20 percent increase
Discussions have taken place on the question whether a one-time increase of the fixed salary of managing directors should be allowed. The Bill now provides for a possibility of a maximum increase of the fixed salary of 20 percent on an individual basis during the period as from 26 October 2011 up to the date the Bill becomes law, provided that this increase is subject to all other restrictions that may apply with respect to executive compensation. During the debate, the Minister has mentioned that the maximum increase is appropriate and fits in the context of the Bill.
We also refer to our December alert in relation to the extension of the scope of the Bill to Dutch subsidiaries of foreign financial institutions that have received state support within the meaning of section 107 of the EU Treaty.
For more information, please do not hesitate to contact us. Obviously, we shall keep you posted of any relevant developments.