Proposition 53K1316

Proposition de résolution relative à la politique de rémunération des établissements financiers soutenus par le pouvoir fédéral.

General information ¶

Authors

CD&V Leen Dierick
Ecolo Muriel Gerkens
Groen Stefaan Van Hecke
LE Josy Arens
MR Philippe Goffin
N-VA Karel Uyttersprot
Open Vld Herman De Croo
PS | SP Olivier Henry
Vooruit Caroline Gennez, Bruno Tuybens

Submission date

March 24, 2011

Official page

Visit

Status

Adopted

Requirement

Simple

Subjects

board of management fringe benefit financial institution executive bonus payment resolution of parliament State aid board of directors

Voting ¶

Voted to adopt

Groen CD&V Vooruit Ecolo LE PS | SP ∉ Open Vld N-VA LDD MR VB

Contact form ¶

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Discussion ¶

March 31, 2011 | Plenary session (Chamber of representatives)

Full source

First, I will start with the report.

You will then continue on a personal basis. The registered speakers are Mr. Uyttersprot, Ms Dierick, Almaci and Gerkens and M. by Tuybens.

Mr. Speaker, since the House decided to take over this matter in urgency, we discussed it in the Finance Committee this week. The report was prepared, but could not be distributed due to the little time we were given. That is why, without being excessive, I will present it, nevertheless, extensively to the members of this Chamber.

We are in the framework of a proposal for a resolution, which takes on a resolution that has already been adopted by the Flemish Parliament. The draft resolution calls on the federal government to ensure, through its representatives, that the top management of financial institutions does not receive excessive bonuses as long as the public aid has not been fully reimbursed by the companies concerned.

The relatively brief draft resolution calls on the government to ensure that, through its representatives within these financial institutions, non-executive directors cannot receive share-related remuneration. This principle is also included in the Corporate Governance Code, which was dubbed the Lippens Code, in another time, but this practice is not explicitly prohibited.

Here is a summary of the discussion we had in the Finance Committee. by Mr. Henry found that the financial crisis has hit the real economy in full swing, resulting in numerous business closures and numerous job losses.

Inserting itself within the framework of the resolution proposal, but with the aim of being more precise and clear on this subject, Mr. Henry submitted Amendment No. 1 to refine the draft resolution and, in particular, to define the notion of excessive bonus, an adjective on which we have somewhat stumbled.

Its amendment limits the variable remuneration to 30% of the fixed remuneration, which prevents the distribution of huge bonuses and allows the institution concerned to use the undistributed money to consolidate its results and reinvest in the company.

Furthermore, variable remuneration should be conditional on achieving social and environmental responsibility objectives, such as support for ethical financial products, staff training, and even research and development. In addition, the amendment prohibits the distribution of bonuses when the institution makes collective redundancies.

Your servant, in the debate, considered that the content of the draft resolution was relatively vague. What utility does the proposed resolution still present for the government? What exactly is meant by the fact that bonuses should not be “excessive”?

I draw attention to the fact that, in the draft report, Mr. Speaker, at the bottom of page 5, it is not the 2nd amendment, but the 1st amendment, which is the only one that has been submitted in substance.

by Mr. Reynders, Minister of Finance, responded that, "In the meantime, two of the three financial institutions that have received public aid, namely Dexia and BNP Paribas Fortis, have already set their remuneration policy for 2010. Only KBC needs to make it known.”

“The government,” he added, “has not waited for the resolution proposal to be considered to take a series of precise measures. First, in terms of corporate governance, Belgium applies the strictest code that has been established at European level, as does France.

The State shall also ensure that the remuneration of managers of these financial institutions is ⁇ not higher than that of managers of public enterprises whose majority shareholder the State is still such as Belgacom.” The Minister also noted that there was a risk of limiting the variable remuneration to a certain percentage of the fixed remuneration without imposing a limitation on that same fixed remuneration. The Federal Government shall impose on financial institutions the same requirements as those expressed by the Flemish Government.

Regarding the sanctions imposed on financial institutions, the Minister also notes that bonuses are already taxed at 70% in Belgium. According to the Minister, it would therefore not be very relevant to impose even more bonuses as a penalty. The Minister concludes by saying that the draft resolution is in line with the above-mentioned initiatives that have already been taken by the government with respect to the relevant banks.

by Mr. Tuybens subsequently notes that the resolution proposal under consideration is part of a broader set. It is not only about the variable salary but also about the fixed salary and the relationship between the two. by Mr. Tuybens therefore suggests inviting public administrators within the financial institutions concerned to a hearing before the committee, so that they can explain how they apply the government’s oral instructions in practice. This may help to clarify further what exactly the term excessive covers.

Minister Reynders proposed that, in addition to the public administrators, the committee also hears the delegated directors of the banks concerned to ask them what would be the consequences of a limitation of the salaries of the Belgian bank executives. In the debate, Mr. Uyttersprot believed that the draft resolution sends a sufficiently clear signal to financial institutions, as did the resolution already voted by the Flemish Parliament. The draft resolution, he stressed, was co-signed by almost all political groups.

Your servant returns to the debate to see with satisfaction that the government has commissioned the public administrators of the banks to ensure that the bonuses are not exorbitant. Therefore, and given the fact that two out of three banks already expressed their views on the issue for 2010, I found that resolution was somewhat superfluous.

Ms Almaci refers to the hearings held within the special committee for the examination of the financial and banking crisis, during which delegated directors of banks stated that high remuneration was justified by the exceptional qualities that these directors must possess. The interviewer also considers that the Corporate Governance Code does not engage sufficiently those to whom it applies. Administrators and managers, she adds, will change behavior only if certain provisions of the Code are made binding. In any case, the proposal goes in the right direction.

by Mr. Arens fully supports the draft resolution and Mr. Verherstraeten believes that the text of the draft resolution should be explicit. Indeed, he says, the text may suggest that excessive bonuses would again be acceptable once public aid has been fully refunded. For this purpose, Mr. Tuybens proposes to clarify the text by inserting in paragraph 2 the word “certainly” between the words “top managers” and the words “as long as” and for this purpose, he deposits Amendment No. 2.

The following votes, Mr. Speaker, Ladies and Gentlemen, give the following result. Amendment No. 1 is rejected by 9 votes against 5; amendment No. 2, which is in fact a text toilet and explains it, was adopted unanimously and the draft resolution, as amended by amendment No. 2, is also adopted unanimously.

In conclusion, I would like to thank the services who, too, and under difficult conditions, worked in the emergency and did a remarkable job.

I thank you, Mr Coëme. You can get involved with your personal intervention.

Thank you Mr. President. I will be less neutral than in my report, of course. We will change the tone a little.

The financial world is definitely a virtual world. Our fellow citizens and ourselves, let us confess, have discovered the gap between finance and economy, between the virtual and the real, between the money of some and the difficulties of others. I must add, as everyone knows, that the financial crisis leads to an economic and social crisis of considerable scale, causing closures of ⁇ and numerous job losses.

The rush with which we have to discuss this subject, in these places as in the Flemish Parliament, shows that the lessons of the crisis have not been learned. When you see what top managers record as bonuses, as variable remuneration, there is something to be interlocked with.

Worse in my view, these remunerations are sometimes granted at the expense of the workers of the company and create a discomfort at the time when the salaries of these workers are broken by the employer, on the occasion of agreements that otherwise have their merits.

My dear colleagues, we are dealing here with striking figures: the 2009 annual salary of the Dexia boss: one million euros and 400,000 euros of bonus – Dexia that the government had to save; at BNP Fortis, we flirt with the same numbers. How can we not find this shocking?

That is why it is important for us to act. Public money can’t be used to finance big bonuses for some top managers. That is why the PS wants to regulate this matter consistently and clearly.

We do not oppose this proposal for a resolution, which will probably be unanimous right now, but we believe that in some respects it may appear late and, therefore, somewhat superfluous in so far as the government has already asked for moderation in this matter.

We have submitted an amendment in this debate in order to go further. According to this amendment, the variable remuneration would be limited to 30% of the fixed remuneration, which prevents the distribution of huge bonuses and allows the company to use the undistributed money to consolidate its results and reinvest in the company. Our amendment also provides that variable remuneration is conditional on achieving social and environmental responsibility objectives such as support for ethical financial products, staff training, research and development. It also provides that these benefits are prohibited in case of collective dismissal during the relevant year. What is more normal? How can this be explained to the public?

Our amendment was rejected by a majority of members of the committee. This is democracy, but you will not stop me from thinking that this vote reflects a very low will to change things.

This debate on the resolution is, in our view, insufficient. I think it is shocking to see institutions financially supported by the state grant themselves exorbitant remuneration and bonuses. But it is equally shocking to learn about the remuneration and bonuses granted to the bosses of listed companies, which count in our economy and which employ a huge number of workers. Therefore, it is necessary and urgent to limit remuneration and the granting of bonuses for all these companies.

For us, variable salary must be an acceptable part of the fixed salary.

Furthermore, the fixed remuneration should be based on precise criteria related to the company’s results and investments.

Furthermore, going well beyond the Lippens Code, we request to provide for the obligation to publish in the remuneration report, the wage gap between the top management and the average salary of employees. Figures have been published. The press has been full of this in the last few days. In 2009, 7 million for the boss of InBev, 3 million for Delhaize, 2.4 million for Belgacom. I ask you: do these remunerations still correspond to something reasonable? In view of these amounts, one can ask whether there is still an economic logic.

Mr. Coëme, I understand very well what you say. You are right to ask yourself what is meant by excess bonus. When it is not defined, it is difficult to implement. This is a resolution that is somewhat the reflection of the will of the Parliament.

That said, I was fortunate to be the chairman of the House before Mr. Flahaut, whom I value. I think I know that an Anderlecht player sitting on the reserve benches receives a double salary than that of the House President. Does the "excessive" bonus qualification apply to the remuneration of these players?

Mr. De Croo, comparison is not right and you know it well! But if you really thought that comparing with football stars is a valid comparison, you would disappoint me a lot. Indeed, even more than in the financial world, professional football at this level has become a matter of "fric" to great support of people who use money from Russian billionaires and others. My friends, I think this sort of comparison should be forgotten. Per ⁇ there are more sensible ones.

But I’ll go into your game and, in my turn, make comparisons. Did you know that in a large distribution company – I will not mention it, we know it – the boss earns 123 times more than a cashier who is five or six years old?

In a well-known brassicole group of Belgian origin, a young manager earns 110 times less than a delegated administrator. My friends, it is time to return to reason! Where is distributive justice?

I had the weakness of going back in history and finding that great bosses, once, when “finance” still rimed with “real economy” – and I go back a few decades – were bosses such as J.P. Morgan or Henry Ford advocated a wage scale from 1 to 20 in the first case and from 1 to 40 in the other within the same company. That’s already a lot, in my view at least, but it’s hard to understand the current ratio that I just gave you and I think it’s purely immoral.

Some will tell us that all this belonged to the "old time", that this time has passed, but producing a car or dealing with finances falls within the same economic activity. Only the salaries exploded. Not the profession.

This is the reason why, in conclusion, the PS group will incessantly submit a bill to put an end to these abuses, to those excesses that shock the population and to give back a little economic and social logic, ⁇ a little morality also in a environment that crashes again as if nothing had happened.

Dear colleagues, I think that neither the states, which have contributed greatly to recover or even save some of these ⁇ , nor the taxpayers, nor the citizens can let go without reacting with firmness.

Mr. Speaker, my group supports the resolution. However, my group is also opposed to the exuberant bonuses.

Nevertheless, 99.99% of our ⁇ have nothing to do with exuberant bonuses.

However, we are also convinced that there should not be too much interference by the government in relation to private companies. Therefore, we did not approve the amendment proposed by Mr. Henry in the committee.

We support this resolution for the following reasons.

In this resolution, the Chamber calls on the representatives designated by it in the general assembly and the boards of directors of financial institutions receiving the support of the federal government to call for fair remuneration and to ensure that excessive bonuses are granted to top management and executive directors, ⁇ as long as the state aid has not been fully repaid.

In addition to a recommendation for the executive directors, there is also a recommendation for the non-executive directors. It is requested that they receive no income or share-related remuneration, which is fully consistent with the Corporate Governance Code, which has been established since the June 2010 Act and whose first results must be submitted in 2011.

In addition, the above-mentioned corporate governance code includes the obligation to publish in the annual report the salaries of the top managers.

We are therefore convinced that this resolution gives the necessary signal to those to whom the resolution is intended.

We also hear that the Flemish government has already instructed its representatives to also ensure that a similar resolution is applied.

First, I would like to thank the rapporteur for the very comprehensive and correct report presented here.

Last week, together with Mr Tuybens, I asked a question to the minister responsible, in particular to give a clear signal that the federal government is also opposed to excessive bonuses in financial institutions that have received government aid.

The Minister gave a comprehensive answer to our question. However, we would have liked a stronger and faster signal. Therefore, we adopted the present resolution.

The resolution is a step in the right direction. However, it is also at CD&V’s request that by adding one key word the resolution has been refined, reinforced and clarified.

CD&V also wants no excessive bonuses to be granted, even after financial institutions have repaid government aid.

The resolution is a good step, but the discussion has not yet ended. If we really want to do something about the excessive bonuses, we will have to anchor that legally.

We have not yet taken the time for this. I think it was now intended to give a quick signal. If we really want a deeper signal, we must legally anchor that and we must have an extensive debate on this in the committee. Then we must take our time for that.

This fits into a much broader context. We need to review the entire re-numbering policy.

For all clarity, we are against excessive bonuses, but we are not against bonuses in themselves. Bonuses are not always bad. If there is sufficient transparency, if there is only a clear link to long-term goals, and if they do not encourage greater, excessive risks, bonuses can also be good.

We would ⁇ like to initiate the debate on this. The resolution is a step in the right direction, but there is still much work to be done. We look forward to the debate in the committee. We hope that the bills and the hearing will also be put on the agenda there.

Mr. Speaker, dear colleagues, whoever looks at the facts sees that today it is business as usual, and that while we are discussing an IPA in a committee, about a wage standard where the margin for an increase is 0.3%. Then, when we look at the exuberant wages that people re-exert themselves in those companies, everyone’s stomach turns.

In 2009, the salaries of top managers of the companies included in the BEL20 increased by an average of 23 % shortly after the crisis to an average of EUR 2.27 million. The twenty top managers of the BEL20 companies have jointly raised the equivalent of what an average 1 500 employees earn, after several painful restructuring and massive job loss, caused by a system of a group of top players who have already offered themselves large and excessive bonuses.

Business as usual. I would very much like to believe in the corporate governance codes and the comply-or-explain rule, but see that that comply-or-explain rule in the past has often remained dead letter and that one even escapes it for privacy reasons.

Not only have several newspapers indicated that those salaries are simply not correlated or barely correlated to their results or to their performance. Also clear research by a former bank director in the Netherlands, in a doctoral study, shows that these salaries are in no way proportionate to good results and that they also do not make whether someone stays or leaves, that this is not the reason why one accepts a particular job.

So I am very pleased with the arrival of the resolution, it is not a moment too late. I am very pleased with the arrival of the resolution and, it may surprise some, I am very pleased to read also last week Thursday at Belga that our Minister of Finance Reynders threatens with an additional tax for banks in case of excessive bonuses. This is more than high time. It is necessary not only to stay with this resolution but also with concrete proposals.

Dear colleagues, I will not stretch it for a long time today, but I would like to draw your attention to a bill we submitted in 2008 and now reinstated, in which we do something about those excessive wages and those parachutes and the hook behavior. Some, and I give the example of Mr. Votron, compared themselves just before the crisis with top athletes, in order to raise wages of which everyone falls behind, just before their business and thus also our country entered the depth of the realm. The arrogance and vanity that is striking to certain contemporary top managers ⁇ ins itself, despite all good intentions and codes.

It is time to move away from the non-binding and time to take the path of effective measures. For this purpose, I count on your support, not only now with this resolution but also in the future.

Mr. Speaker, I come to the tribune because I like to look at the people I talk to. I will be brief.

As others have said before me, this resolution has a symbolic scope given the thinness of its content. However, it remains interesting because it gives an orientation and, above all, represents a significant majority of this parliament, therefore political groups.

This means – at least this is how I intend to interpret it – that we will finally be able to work properly within our Parliament on the remuneration, fixed or variable, bonus or not, of the directors and managers of banks (this is the subject of the proposed resolution), but also of the companies listed on the stock market, in a more general way.

This pleases me. I remember previous discussions and discussions. Mr. Tuybens, we worked together on listed companies, in commercial law, when at the end of 2009, we voted the new law on good corporate governance; we tried to introduce guidelines limiting remuneration, prohibiting directors from being paid from speculative games on stocks, thus producing short-term returns rather than investments in the social and social object of companies. For banks, this is the same dynamic.

We have not been followed in our proposals. The work had to start again now. For me, this resolution means the establishment of an agreement within this Parliament to deepen this matter and work on it in concrete ways.

I deduce that, when within a good month the priorities will be identified in the Chamber’s Finance Committee, the groups will request that proposals be put on the agenda. Ecologically green! He has also already commented on this topic.

Furthermore, I think that if it is important to vote on this proposal for a resolution as part of an emergency procedure as we do today, it is because the moment is symbolic. This is the time when we decide on the granting of these bonuses, these bonuses, these remunerations. This amplifies the message that the government has sent – as Minister Reynders told us – to the directors of the banks in which we are shareholders.

As others have spoken of before me, this arrogance that has returned to the great galop among the directions and administrators of the banks must be lifted. The state and the citizens had to help them, they had to fly to their aid at a time when they had let themselves trap and embark in a search for immediate profit, in speculation, in gambling with the money of the citizens. But a few months later, when profits return quickly, it is the same attitudes, the same behaviors that return with a non-distribution of profits. When I say non-distribution, it’s obviously towards their customers, their staff, development or investments in companies, SMEs and the economy.

This is completely unacceptable for parliamentarians but also simply for the Democrats of this country who want justice and fairness.

We will support this resolution and we hope, we will ask, that the legislative proposals relating to the subject, which go much further and in a much more precise manner, will be worked as a priority in the future work of the committee.

I am not a big fan of resolutions. I am a cool fan of it, because I think that Parliament should engage in legislative proposals, amendments and more in addition to its control tasks.

Why have I co-signed this resolution – I thank colleague Tuybens for proposing it to me –? Because there is not only the moral aspect, it is also a call to the government and to the administrators in the institutions of the public sector, and also because the Rules of the Chamber obliges the minister – whoever it is – to give in his budget for the next year a response to the resolutions sent to the government and here approved. Therefore, it is less a free act. It is much less a kind of evocation or a shooting prayer that would direct a parliamentary to the heavens of the government, but the ministers are obliged to say in their budgets what they have done with those resolutions.

There is then a small control, an interaction between the submission – it is the better if it is unanimously approved – and the response that the responsible minister is obliged to give to the resolution, when submitting his budget. It is somewhat more enforceable than what it would otherwise possibly be.

There are weaknesses in a resolution. What is excessive, for example? However, it is also a signal of uncertainty. When one helps institutions with money, which comes from the taxpayer, then one must also use that money with moderation, with caution and, if possible, under control. That is why, Mr. Speaker, my group will adopt this resolution.

Mr. Speaker, I also want to thank the rapporteur and the chairman of the committee and, since I am the chief speaker, also the colleagues, for their support for this resolution and for approving the urgency last week. At the kind request of some of my colleagues, I will limit myself to three points. There have already been many elements and I will of course not repeat them.

The first element in the resolution calls for restraint and calls for no excessive bonuses to be granted. In response to the question of colleague De Croo, I would like to say the following, and colleague Dierick has already talked about it.

Last Thursday we asked the Minister of Finance what were the consignments for government executives in those relevant banks and how they skipped them. We heard from the Minister that there were oral consignments. It could be flou artistique, but well, there have apparently been verbal consignments.

Therefore, in the Committee on Finance, we asked that those relevant government officials would report to the committee to come to explain whether they actually received consignments, what those consignments were and especially how they skipped with the consignments. This is the answer that can be given to the question of colleague De Croo. I don’t think the word “excessive” can be defined. It is not an exact science. But let the government officials of those banks come and explain how they have skipped the ministry’s consignments. In this way, we can learn something from it.

Colleagues, I think that, among other things, this theme sufficiently demonstrates that the self-regulating self-regulation of those companies and of the public sector is truly illusory. I think we should refer that to the category of the gentlemen Gili and Copperfield. It is an illusion that these companies would regulate themselves. Therefore, I absolutely agree with the pleas of several colleagues to go further and define what society expects in relation to the companies.

I also find it regrettable that, as the editor-in-chief of a newspaper correctly wrote, the new Chairman of the VBO, who has recently been elected, has missed the opportunity to clearly defy against the grey culture in some banks and in other companies.

There is also an element of prohibition of share-related performance-related remuneration for non-executive directors, as requested in the Code of Corporate Governance and as requested in the clear recommendation of the European Commission.

I hear colleague Dierick very much pleading to anchor something in a law. I would like to make it clear that, with regard to this latter element, we are discussing the prohibition of share-related performance-based remuneration for non-executive directors. I hope to understand that this is an announcement of support for those bills. If you are in doubt, I hope you are strong enough to add the act to the word. I think that in this way we can clearly move forward with all of them.

After the discussion is over, I give the floor to Mr. The Minister .

Mr. Speaker, I would like to thank the groups that introduced this resolution proposal. Like the mr. Coëme recalled it just recently, she comes to confirm what the government has asked the leaders of the main banks, even if she intervenes after the decisions have been made. When I say “after the decisions have been made”, it refers to Dexia and BNP Paribas Fortis. This is a support for the approach that I had the opportunity to explain in plenary in response to questions.

I also agree with several speakers on a second element. The formula that is repeated is an orientation. Avoiding excessive bonus or variable remuneration is an element, but I think it was important to go further. I said this in the committee as well as in the plenary.

The [...]

This is not important, Mr. President. The room is made to get in and get out. It’s rather good news to see so many people entering the Room!

All is to stay there!

Wait a moment, Mr. Minister, let everyone settle!

Mr. Speaker, I knew the subject was passionate, but I didn’t know that my speech would attract so many people! (Brouhaha) by

Here, Mr. Minister, now you have the word.

Mr. President, I thank you. Having already experienced this experience in the European Parliament, I am relatively excited to see so many parliamentarians come in to listen to me. There may be other reasons.

As I said at the moment, this resolution uses a terminology that is difficult to explain in the debate and with our representatives. When it comes to variable bonuses or remuneration that should not be excessive, it gives a relatively limited framework. The government wanted to go further by calling for the strictest codes in this field to apply to these companies in Europe and neighboring countries.

I would like to add two elements. With regard to this remuneration policy – this topic clearly arouses passions – it would be very useful that the debate takes place in a quite transparent manner with the committees in charge at parliamentary level. I understand the request of Mr. Listen to the public administrators. The chairmen of the remuneration committees sit within these institutions: Mr. Dehaene at Dexia, Mr. The company is BNP Paribas Fortis. I think mr. Huyghebaert is not directly in the remuneration committee, but there is also a chairman for KBC. It would be very useful to hear the remuneration policy carried out in these different companies.

To highlight what I know of the decisions that have just been made, these banking companies have remained largely below the remuneration granted, ⁇ in some other companies that are more heavily public yet and with wider participations of the state. The situation should be considered in general.

But I look forward to the support that – I hope – will be granted unanimously to the approach that had already been adopted by the government with these banking companies. I also hope that we will have the opportunity to hear the chairs of the remuneration committees of these three banking companies and that we will be able to discuss with them and among us the best remuneration policy to implement in these companies.