Change to bonus cap in financial sector on the way
Last week, the Dutch House of Representatives approved an amendment to the Cash Payments Act that significantly narrows the scope of the 20% bonus cap. Under the amendment, the bonus cap will in future apply only to identified staff. For other employees, including IT-specialists and data experts, the statutory bonus cap would no longer apply.
If the amendment enters into force following completion of the legislative process, both the level of the bonus cap (20%) and its formal scope (all financial undertakings) will remain unchanged. However, the category of persons to whom the bonus cap applies will be substantially reduced and limited to individuals “whose professional activities have a material impact on the risk profile of the undertaking” (i.e. identified staff). In this context, various provisions of Chapter 1.7 of the Dutch Financial Supervision Act (Wet op het financieel toezicht), where relevant, will be amended.
This change may have significant implications for financial undertakings operating in the Netherlands. The amendment is expected to result in regulatory relief, operational simplification and an improved competitive position in the labour market. As a result, financial undertakings are likely to review and potentially amend their remuneration policies, in particular to enhance their attractiveness to specialised talent. This may raise questions regarding the definition and identification of identified staff, governance arrangements, compliance requirements, as well as the employment law and supervisory law implications of adjusting remuneration policies.
The amendment and the most recent vote in the House of Representatives can be consulted (in Dutch) via:
We will continue to monitor the legislative process closely and provide relevant updates.
Link to the news article (Dutch)
For further information, please contact Van Doorne: Ruben Verschuren
