The reprimand for former ING CEO Ralph Hamers is more than a slap on the wrist. According to FD journalist Rutger Betlem, the ruling shows which course the Appeals Committee of the Bank Disciplinary Law, which issued the reprimand, may take. ‘People within the boards of directors of banks will wonder whether it is now going to be a kind of wild west.’
In 2018, ING’s Supervisory Board proposed to increase the remuneration of former CEO Hamers by half to around 3 million euros per year. That caused a lot of commotion, the proposal was withdrawn a few days later.
It is the first time that a bank chairman has been reprimanded for his behavior. A unique situation, says Betlem. ‘It’s not just Hamers who gets a reprimand. Supervisory Board members Jeroen van der Veer, former CEO of Shell, and Henk Breukink receive the same criticism.’
According to the appeals committee, Hamers and the supervisory directors have damaged confidence in the banking system. They had an exemplary function and ‘failed to do so’.
Hamers had previously been acquitted in the case, but it was nevertheless decided on appeal to proceed with the reprimand. ‘Initially they wanted a professional ban. Two years for the supervisory directors and one year for the CEO. They ultimately thought that was going too far because this happened five years ago and because the wage increase did not go through. But this is a big step.’
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Social fuss
In the appeal, even more attention was paid to the minutes. ‘There are several warnings about the social commotion that such a wage increase could cause,’ says Betlem. ‘We had just emerged from the credit crisis, confidence in the banks was already low. The remuneration committee nevertheless decided at the time to continue with the wage increase, even though it was already known that an investigation was being carried out into a money laundering case in which ING was involved.’
The fine for that case came in September of that year, while the bank had already been informed of the investigation in February. It also became clear at the time that the fine could amount to ten percent of the bank’s total turnover. ‘That was a huge fine,’ says Betlem.
Wild west
The committee’s message is clear, Betlem thinks. ‘Disciplinary law has so far dealt with matters such as a grab from the cash register. But the fact that a chairman of the board has to admit that his own remuneration policy was not in order is really new.’ He expects that the board of directors has looked at the verdict with tension. ‘One will wonder whether a wild west situation will arise already.’
