(Bloomberg) -- ABN Amro Bank NV should to be able to find a good replacement for its chief executive without having to offer a higher compensation, according to the Netherlands’ finance minister.
The bank has succeeded in finding executives in the past and “there is no reason to think that it will not work in the future,” Finance Minister Eelco Heinen said in an interview with RTL-Z on Tuesday. The state is the largest shareholder of the Amsterdam-based bank.
“We are very critical about salary increases,” at ABN Amro, Heinen said in the interview. “It’s a royal salary already,” he said.
ABN Amro kicked off a search for a new boss after Chief Executive Officer Robert Swaak in August said he would step down in the first half of next year. The country’s restrictive pay regulation for banks has been a stumbling block in attracting talent and is complicating the lender’s search for a new chief executive.
ABN Amro highlighted in its annual report that a cap on banker bonuses has kept pay for its chief executive officers below European counterparts. Swaak last year took home €1 million ($1.1 million), placing him at the lower end of what contemporaries earn.
The finance ministry is undertaking an “evaluation” of the laws regulating the levels of bankers’ salaries and intends to publish the results in the coming months, Bloomberg reported on Monday. Any changes would need to be approved by parliament before they take effect.
The Dutch rules ban variable compensation for top management at banks in which the country owns a stake, such as the second-biggest listed domestic lender, ABN Amro. The regulation also stipulates that the fixed salary for members of the executive board at those banks can only increase as quickly as raises negotiated with the labor unions in collective agreements for the industry.
The laws cap bonuses at 20% of fixed salaries across the wider banking sector, which includes the country’s largest lender, ING Groep NV.
The Dutch state, which bailed out ABN Amro during the financial crisis, has been gradually paring its stake in the bank after it was relisted in 2015. It sold ABN Amro shares worth about €1.17 billion last month, lowering its stake to 40.5% from 49.5%.
The government has vowed to fully privatize the lender. “Here sits a liberal minister of finance who doesn’t think that banks should be in the hands of a government,” Heinen told reporters last month.
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