Recap of the main changes

The Dutch Act on further remuneration measures for financial undertakings (Wet nadere beloningsmaatregelen financiële ondernemingen, Wnbfo) introduced, amongst others, the following important changes:

  1. the introduction of a five-year retention period for shares and similar financial instruments which are part of the fixed remuneration;
  2. a limitation of the possibility to deviate from the bonus cap with respect to non-CLA personnel and the introduction of a reporting obligation for the use of this deviation; and
  3. the obligation to account for and report on the ratio between remuneration and the social function of the financial undertaking and the manner in which this is established. 

These amendments are relevant for financial undertakings with a registered office in the Netherlands, their subsidiaries, and, under certain conditions, group companies of Dutch financial undertakings, as well as Dutch branch offices of financial undertakings with a registered office outside the Netherlands.
Please also refer to our earlier contributions on this topic in July 2019, July 2020 and June 2022, in which we have explained the amendments in more detail. 

End of transition period approaches, time for action!

As mentioned above, the Wnfbo should be complied with since 1 January 2023. However, transitional law applies with respect to employees who were already employed prior to 1 January 2023. With respect to those employees, the transitional law provides for a transitional period of one year (i.e. until 1 January 2024) to comply with (i) the retention period for financial instruments in fixed remuneration, and (ii) the limitation of the possibility to deviate from the bonus cap.
This transitional period gives employers the opportunity to carefully review existing remuneration arrangements, consult with the impacted employees and, where necessary, make any necessary adjustments in order to comply with the Wnbfo and avoid sanctions. Currently, financial undertakings still have a little under 6 months left to adjust their remuneration arrangements with employees who were already employed prior to 1 January 2023 (if necessary). 
For completeness’ sake, the Wnbfo should already be fully complied with in respect employees hired on or after 1 January 2023. The transitional period only applies to employees who were already employed prior thereto.

How can we help you?

As the Wnbfo may require employers to change the existing remuneration arrangements made with employees who were already employed prior to 1 January 2023, it is important to identify which employees and functions are affected and develop a plan on how to change these arrangements and compensate affected employees in a way that is in line with both Dutch financial regulatory law and Dutch employment law.
Loyens & Loeff has a team of experienced employment law and financial regulatory professionals, who understand the complexities of the regulatory landscape and are happy to assist and guide you through the process of implementing the new rules, providing valuable insights and creating sustainable remuneration practices that align with your business objectives.
We are of course also happy to assist if your company already made an assessment internally, but you want to exchange thoughts on some specific aspects or you could use our help with the next steps. 
Feel free to reach out to us in case we can be of assistance or in case you would like to receive further information. We are looking forward to working together.