The CEO of the biggest Dutch bank is paid a tenth of his American counterparts, and it’s a national scandal

To the Dutch, it looked excessive. The board of ING, the biggest bank in the Netherlands, said last week that it planned to increase the pay of CEO Ralph Hamers by 50% this year. The CEO’s pay was “significantly” below the median for other European CEOs, the board said. But after a forceful political backlash, today the company scrapped the plan.

To a bank boss looking on from the US or UK, Hamers’ pay, even after the 50% hike, would be considered insulting. Last year, Hamers was paid a mere €2 million ($2.5 million). The board wanted to give him deferred shares worth €875,000 and increase his base salary by 2.2%, bringing his package to just over €3 million for 2018. By comparison, last year JPMorgan CEO Jamie Dimon made $29.5 million; other major Wall Street bosses also made around 10 times more than Hamers.

The Netherlands has strict rules about executive compensation, limiting bonuses to 20% of base pay for banks and other major financial institutions. Even so, ING is frugal by international standards. The bank’s CEO made 33 times more than the average of ING’s 54,000 employees last year, the company said. According to Bloomberg, the average CEO of a big Dutch corporation makes 171 times the average worker. ING’s company policy limits its CEO pay to “slightly below the median” for top execs in the Euro Stoxx 50 equity index, which it calculated as €3.3 million after various adjustments.

Nevertheless, the public backlash against ING’s proposed pay package was swift and brutal. At the end of last week, the Dutch finance minister said the government might block the raise because “ING is not a cookie factory, it is a systemically important bank.” Within days, the board had abandoned the plan.

“We realise we have underestimated the public response in the Netherlands on this clearly sensitive matter,” Jeroen van der Veer, chairman of ING’s supervisory board, said in a statement. “To prevent an ongoing public discussion damaging ING and its employees, the Supervisory Board has reconsidered its proposal.”

In the US, CEOs of the biggest banks are paid far more than their European counterparts, and especially ING’s Hamers. Last year, Morgan Stanley’s CEO James Gorman received a 20% pay rise, while Bank of America’s Brian Moynihan received a 15% increase. Hamers is also paid less than Ross McEwan, the CEO of RBS, which is still majority-owned by UK taxpayers and just turned its first profit in a decade. Last year, ING made a €4.9 billion net profit and its shares performed in line with the main Dutch stock market index.

In the Netherlands, bad memories of the financial crisis linger. ING received a €10 billion bailout from the state in 2008, and despite repaying the aid (and then some), officials and the general public still aren’t in a forgiving mood.

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