Bankers are all sharks! Or is it just more nuanced and is a salary of 500,000 to one million euros a acceptable reward for the highly complex and responsible functions they exercise?
Louk de Wilde (69) knows the boardrooms of the banking operations from within. He started his career in the early 1980s as a young manager with a bonus of 3000 guilders and ended up as ceo of Fortis Switzerland. He earned a good salary by several tons, but became not very rich. He stopped in 2004 when mother bank Fortis got into trouble and eventually had to be taken over by the Dutch and Belgian Governments. De Wilde came in the news last year with his book Bankers never learn. In his book he explains why banks never really learn from a crisis. “You see it now to the policy of the central banks, by constantly pumping more new money into the economy. It is to make paying off debts by new debts. That leads to a new crisis in the long term. “
De Wilde lives partly in Switzerland, partly in the Netherlands and has closely followed all the commotion about the salary increase of a ton for the Board members of the ABN Amro. “First the remuneration structure of the banks for the crisis was completely out of control. It can of course not be the case that a manager can be financially independent in a few years time. They are not independent entrepreneurs, who put a product or a service on the market for their own risk. They may earn millions for all I care. But for a director or manager there are other standards.
David saw the financial excesses of the 1990s arise in business in the United States. “There was the concept of shareholder value. If the management could realize that the shares went up, they were allowed to earn everything what they wanted. That’s what came to us via England, first at the business and later also at the banks. ”
The salary of the members of the Board of ABN Amro finds de Wilde certainly not out of proportion. “You can argue whether it must be some more or less, but it’s not nearly as much as what the top in business makes. The bank salaries has become the plaything of politics. I find that sad. ” De Wilde knows from experience that it is not easy to lead a bank. “They are very complex organizations, with on the one hand, employees in the sales like to take risks and, on the other hand, the risk managers who should be on the brake pedal. You have always the trade off: what can be done and what could turn out wrong. ”
“You have to manage that your records are in order, your balance and comply with the rules of the supervisor. You have to deal with politicians. You need to make sure your have customers and manage to keep them. All of that makes you need highly qualified people. That cosst money, but then we talk not about a million or so. That is greatly exaggerated. And certainly do not award them with options or bonuses.
With bankers, so knows de Wilde, nothing human is strange. Their salary is not only to purchases or to buy a car, it is also a piece of recognition of their abilities. High salary means high regard. David: “also in my time there were all of those desks with lists, which you could see what other companies and banks paid to their top employees. Then you might step to your commissioners with the question: what are we going to do about my salary. Look what they earn at the competitor. And if you do well and you makes 60 million profit no major problems there with a high salary. “
Yet shows that many supervisors in both the public and private sector, quite easy provided very generous salary increases. David: “that’s right, also there are made a lot of mistakes. But look at many of those supervisors. Some are very rich, owning itself tens of millions. Then you look very different at a salary increase of a half or a whole ton, then that employee whose job is on the line. ”
The question is whether leading a bank is ‘ Nice work ‘. David: “In my time though, I worked as general manager and CEO with a lot of pleasure. But then it was still a venerable bank manager job, like that of the notary and the mayor. That’s obviously changed.
So if it’s still such an attractive job? I am not sure. “