Dutch Bankers’ Code To Limit Bonuses Next Year

The Netherlands Bankers’ Association, or NVB, will implement a code of conduct for banks next year that will limit the level of bonuses awarded and strengthen corporate governance, the association said Wednesday.

According to the Code for Banks, bonuses for board members may not exceed their fixed income by more than 100%. The code also determines that bonuses can be reclaimed, “if long term targets will not be met,” NVB spokesman Kees Verhagen said to Dow Jones Newswires. “This also means that in practice bonuses will often be paid in terms related to achieved targets and not all at once in advance anymore”, he added.

The code also requires strengthening of governance, risk management and auditing for banks.

NVB said that the code will apply from Jan. 1, 2010, and banks must report on the implementation of the code’s regulations in their annual reports.

NVB, with almost 100 member banks, said an independent commission will monitor the implementation of the Code for Banks.

“The members of this commission will be appointed in close consultation with the Dutch Ministry of Finance”, Verhagen said. Shareholders and supervisory boards will also play an important role in monitoring the compliance of the code, he said.

According to the NVB spokesman, the Dutch Code for Banks anticipates a discussion of bankers’ bonuses at the summit of leaders from the Group of 20 industrial and developing nations in Pittsburgh later this month.