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Dutch government delays ABN Amro listing over executive pay row
[AMSTERDAM] The Dutch government delayed the privatisation of bank ABN Amro on Friday because of a dispute about executive pay.
Finance Minister Jeroen Dijsselbloem's move comes after the bank's supervisory board decided this week to increase the base salaries of most of its managers.
The salary increase was widely condemned by lawmakers, who must approve the listing. Some said it was evidence the financial sector had not understood public anger over executive pay that is seen as excessive.
"Parliament has posed a lot of questions about this, and I think it's fitting to first handle those questions and if necessary to have a debate over it, and then we'll see what's next," Mr Dijsselbloem said outside of a cabinet meeting in The Hague.
ABN Amro was nationalised during the financial crisis of 2008, ultimately costing taxpayers around 24 billion euros (S$36 billion). At the end of 2014, it reported a book value of 14.9 billion euros.
The move to boost salaries of most ABN Amro executive board members by 100,000 euros each led to a fractious debate in parliament this week.
"We do not think that ABN should remain property of the state until the end of time," lawmaker Henk Nijboer told Reuters. Mr Nijboer is the spokesman for the junior coalition partner, Labour, on financial affairs.
"But we do want to see a bank that sees service to society as its main goal, and raising executive salaries at this moment is diametrically opposed to that," he said.
ABN Amro spokesman Jeroen van Maarchalkerweerd said the bank accepted the decision.
"The timing was always up to the minister, and that's apparent again now," he said.
Mr Dijsselbloem had previously been expected to recommend the listing to parliament by the end of March, with a sale seen in the second half of the year.
Under Chief Executive Gerrit Zalm, ABN Amro cut 8,000 out of its 30,000 employees, shed businesses and refocused on the Dutch market and private banking. Zalm, himself a former finance minister for the ruling VVD party, has lobbied for ABN Amro to be listed as soon as possible.
The salary increase was granted in 2012, but had initially been declined by managers. Mr Dijsselbloem has told parliament he was powerless to deny the increase, even with the state as sole shareholder of the bank.
Mr Zalm's base pay remains at 759,375 euros and the other managers will now make 707,500 euros, below industry averages.