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


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