More stringent Remuneration rules for financial Entities in the Netherlands

Introduction

On 1 January 2023 the Dutch Act on Further Remuneration Measures for Financial Entities (Wet nadere beloningsmaatregelen financiële ondernemingen hereafter the “Additional Remuneration Rules”) entered into force in the Netherlands. The Dutch legislation on remuneration for financial entities is considered one of the more stringent remuneration regimes in Europe. Although the Netherlands must adhere to European standards on the remuneration policies and practices of various types of financial entities such as credit institutions investment firms insurers and fund managers the Dutch legislator imposes more stringent requirements and applies it to a broader scope of companies.

Previously the Dutch remuneration rules were focused on variable remuneration. One of the incentives for submitting the legislative proposal for the Additional Remuneration Rules was that certain financial entities were increasing their management’s fixed remuneration. It was...