ING slashes bonus pool by 25% after year tainted by record fine

Bloomberg

ING Groep NV reduced its bonus pool by 25 percent after a year marred by a record money-laundering settlement and public discontent in the Netherlands over banker pay.
The country’s largest lender paid out 303 million euros ($340 million) in bonuses for 2018, down from 403 million euros the year before, according to its latest annual report. ING said earlier it would scrap the bonus for Chief Executive Officer Ralph Hamers because of the 775 million-euro settlement.
Bonus pools have taken a hit across Europe, for various reasons. Deutsche Bank AG — plagued by legal troubles and a trading slowdown — cut variable pay for 2018 by as much as 15 percent. Credit Suisse Group AG’s bonus pool will be “more or less” flat after a bad trading quarter, CEO Tidjane Thiam said last month. In France, both BNP Paribas SA and Societe Generale SA are weighing cuts.
ING said the settlement was an “important factor” in cutting bonuses. The fine affected variable pay in every department of the bank, not only top executives and compliance officials, an ING spokesman said in January. Dutch bankers saw a greater impact, and senior employees were hit harder than
junior ones. For senior management, the year-on-year variable remuneration has been reduced on average by more than 60 percent, according to the annual report. The biggest impact was felt in wholesale banking, where bonuses generally account for a larger proportion of pay, the spokesman said.

REPUTATION HURT
Although ING’s financial results were positive, 2018 was disastrous for the bank’s reputation. Local politicians expressed their fury after a prosecutor found that ING fell short in its efforts to prevent clients from laundering money at its Dutch unit from 2010 through 2016.
The scandal prompted Hamers to face tough questions in Parliament.