U.S. financial companies are not the only ones under fire for the bonuses they paid. ING (ING), the Dutch financial group, is asking 1,200 top employees to give back their bonuses, according to a report by Reuters this morning. ING Chief Executive, Jan Hommen told the Dutch newspaper, De Volkskrant, "This is a moral appeal."
ING paid 300 million euros in bonuses in 2008 to about 40,000 employees. Hommen said it will be impossible to retrieve them all. He also said there would be no bonus payments in 2009.
ING did not pay bonuses to its executive board in 2008 after the Dutch government bailed out the company with 10 billion euros ($13.7 billion) last October. But, the real question is why were any employees still paid bonuses? As seems to be the case in U.S. financial institutions, bonuses appear to be seen as an entitlement rather than something earned for good performance. Certainly no major financial institution that needed government bailout money to stay alive can be proud of its performance in 2008.
I wonder if any financial company would have had enough cash to pay bonuses without the government bailouts? Probably not. While companies say they didn't pay bonuses with taxpayer bailout money, that's a bit hard to believe. The may not have used the specific cash they received from their respective countries to pay bonuses, but without that cash infusion, the money they did use to pay for bonuses would have been needed to keep the company going for the next year.
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