Bonus cap could cost Dutch Brexit banking business, employer group says
A limit on bankers’ bonuses is putting the Netherlands at risk of missing out on luring financial services firms over from London once Britain leaves the European Union, Dutch Employers’ Association VNO-NCW said on Monday.
Under Dutch law, annual bonuses for financial services managers are capped at 20 percent of base pay, compared with 100 percent in the rest of the EU.
Along with Frankfurt, Paris and Dublin, Amsterdam is frequently at or near the top of lists of European cities for Britain-based banks seeking to open offices in the euro zone in response to Brexit.
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Reasons include a good quality of life, a favorable tax regime and Amsterdam’s large English-speaking population.
But so far that has not translated to any major wins, with Goldman Sachs telling daily Frankfurter Allgemeine Zeitung it was doubling its headcount in Frankfurt, and Lloyd’s of London choosing Brussels.
“Our plea is that we take care we aren’t harsher (in terms of bonuses) than the EU is asking,” VNO-NCW chairman Hans de Boer said in a statement.
He told de Telegraaf that, provided the rules on bonuses were tweaked, three major banks were still considering Amsterdam as an option. The newspaper named JPMorgan, UBS, RBS and Morgan Stanley as possibilities.
Real estate sources have told that JPMorgan had studied costs of building or aquiring office space in Amsterdam’s financial district, but was sceptical.
It was not clear which three banks VNO considered serious candidates, but it said they would generate 7,000-17,000 jobs and up to 1 billion euros ($1.12 billion) a year in tax revenues, he said.
The 20 percent bonus cap was pushed through by Jeroen Dijsselbloem’s Labour party, the junior coalition partner in conservative Prime Minister Mark Rutte’s previous government, amid public anger over banker pay seen as exorbitant following several major bailouts funded by taxpayers.
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Rutte won elections on March 15 but is still locked in negotiations to form a new, more conservative government that have snagged on immigration issues.
Rutte has said that the bonus cap does not apply to foreigners working in the Netherlands as long as the bank’s office there is not a head office.
The Amsterdam city government is working to remove other potential barriers, by approving new office space and opening more international schools.
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