Adjustment and claw back of bonuses: new rules since 1 January 2014

With immediate effect as from 1 January 2014, long-awaited legislation on the adjustment and claw back of bonuses of Dutch public companies (“NVs”) and financial undertakings entered into force. The key amendments are set out in more detail below.

In short, three new rules have been introduced:

  • the power to adjust bonuses granted but not yet paid to managing directors of NVs and to managing directors and other day-to-day policymakers of financial undertakings as defined in the Dutch Financial Supervision Act if such payments would not be in accordance with the principle of reasonableness and fairness;
  • the power to (fully or partially) claw back paid bonuses from managing directors of NVs and from managing directors and other day-to-day policymakers of financial undertakings as defined in the Dutch Financial Supervision Act if the payments were made based on incorrect information on whether set targets were achieved or whether agreed specific events have occurred; and
  • the duty to withhold from remuneration to be paid to managing directors of listed companies any increase in the value of (depositary receipts for) shares and rights to subscribe for or acquire shares that are held and acquired by them by way of remuneration:
        • following the announcement of a public offer;
        • following a proposal to the shareholders’ meeting to approve a significant change in the identity or character of the company or its business; or
        • following the announcement of a merger or demerger proposal, but before the moment the merger or demerger enters into force.

To read more, see our Newsletter on this.