News - Netherlands

Netherlands - December 2013

Dutch Finance Minister opens consultation on proposed Financial Sector Remuneration Policy Act

On 26 November 2013 the Finance Minister issued a consultation document in respect of the proposed Financial Sector Remuneration Policy Act. Parties can respond until 31 December 2013.

The legislation is proposed to come into effect on 1 January 2015. The proposal introduces a number of measures regarding the remuneration policy of the financial sector, including:

  • a bonus cap of 20% of fixed pay
  • retained remuneration elements
  • a prohibition on guaranteed variable remuneration (except certain golden hello payments)
  • a limitation of severance payments to 100% of fixed pay for statutory directors
  • a prohibition on severance payments, amongst other things if the engagement is terminated by reason of gross negligence or at the initiative of the individual
  • the adjustment and claw back of variable remuneration and severance payments
  • disclosure obligations

The measures are aimed to cover a wide range of engagements, such as employment contracts, service contracts and secondment contracts.

According to the proposal the 20% bonus cap would not apply to managers of alternative investment funds (such as private equity and hedge funds), UCITS managers or proprietary traders. It therefore appears that the proposed 20% bonus cap will not apply to carried interest/ performance fee schemes for fund managers.

For further information or to discuss the consequences of the above, please contact Hans van Ruiten on +31 10 224 6418 at Loyens & Loeff Rotterdam www.loyensloeff.com.

Disclaimer

Content is for general information purposes only. The information provided is not intended to be comprehensive and it does not constitute or contain legal or other advice. If you require assistance in relation to any issue please seek specific advice relevant to your particular circumstances. In particular, no responsibility shall be accepted by the authors or by Abbiss Cadres LLP for any losses occasioned by reliance on any content appearing on or accessible from this article. For further legal information click here.

Circular 230 disclosure

To ensure compliance with requirements imposed by the IRS and other taxing authorities, we inform you that any tax advice contained in this article (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

Copying

If you would like to copy or otherwise reproduce this article then you may do so provided that: (1) any such copy or reproduction is for your own personal use or if it is made available to any third party it is done so on a free of charge basis; and (2) the article is reproduced in full together with the contact details, disclaimer and any logos as they appear on each article.