The AIG bonuses story has been monopolizing the headlines in the United States.
At his press conference tonight, the President was asked about the AIG “scandal” again, and he addressed it, again.
But a very similar story is playing out in the Netherlands. It is eerily similar to AIG’s—even the name of the financial company involved is only three letters long (or short).
The company is ING.
Bank Group ING is a relatively young Dutch global financial services company providing banking, investments, life insurance and retirement services and operates in more than 50 countries.
Just like AIG, ING is in trouble due to the financial crisis. In November, ING received a 10 billion euros ($13.5 billion) bailout from the Dutch government
Sounds familiar?
According to the Dutch newspaper, De Volkskrant, ING paid out 300 million euros (about $405 million) in bonuses to thousands of its employees despite the company’s steep losses.
Sounds familiar?
As late as March 6, the company was still planning to go through “with a plan to hand out bonuses to personnel for fiscal year 2008, despite steep losses,” according to the Dutch web site Expatica.com.
An ING spokesman said at that time, “There were agreements made in the past. We’d like to honor those agreements, but at the same time, we’d also like to take the current situation into account.”
But just as in the U.S., something happened in the Netherlands between then and now.
While I don’t think legions of Dutch “boeren” (farmers) armed with pitch forks have been marching on the Dutch Parliament or on ING headquarters, as has been allegorized in our country, there has been a lot of outrage.
Members of Parliament have been asking Finance Minister Wouter Bos for clarification. One Member of Parliament said: “I’m not referring to average clerks at ING who earn little, and are now concerned they’ll loose their jobs. But I’d find it idiotic if bankers who are partly responsible for the crisis receive bonuses while elderly people live in fear that their pensions will be cut.”
Sounds familiar?
When the Dutch paper, NRC Handelsblad, asked for readers’ reactions to the bonuses, one Dutch reader commented, in part:
It is strange that the government has given ING 13 billion [euros] in tax money without any conditions. Typical government nonchalance in writing agreements; government officials don’t have to work for the billions of tax revenues; they can just spend them like water. How naive of our government.
Sounds familiar?
Well, today ING announced that it was asking 1,200 workers, to return last year’s bonuses. It was also making a “moral appeal” to its top employees to return their 2008 deferred variable cash. Finally, it is also deferring 2009 variable cash compensation for all workers until a new policy is developed.
According to Bloomberg News, ING issued the following message to its employees: “Given the continuing public scrutiny of variable pay practices in our industry, ING is moving to align its variable compensation practices with the new reality.”
But even after all this, there were still rumblings both by the public against ING, and by ING employees against having to return their bonuses.
According to the Dutch Financieele Dagblad, the president of the ING Workers Council Rob Eijt says that the 200 ING managers whom have been asked to return their bonuses feel that they have been wronged, because they have made positive contributions to the results of ING.
While “in the beginning” of the AIG “scandal“ there were some who espoused that many, or at least some, of the AIG recipients of the $165 million in bonuses deserved them, for various reasons, we don’t hear many justifications lately.
It may be that “The Outrage Factor,” as extensively discussed in this week’s TIME, has squelched such expressions of support.
I, for one, can neither assert nor deny that a few may have indeed deserved some recognition in the form of modest bonuses.
The author is a retired U.S. Air Force officer and a writer.