Two Dutch banks recently announced a raise for their CEO’s of about €100.000 per year. In the week following the announcement, several thousands of their clients subscribed at the competing green bank: a sudden increase in registrations. Twitter boomed, some important politicians complained, and the CEO’s decided to cancel the salary increase.
Since about the time of the Occupy movement, western citizen’s trust in banks and bankers has dropped to below zero. Of course, over 99% of us still have bank accounts, but our perception of banks has shifted from ‘a service’, to ‘a group of slave drivers’ or at least ‘a bunch of greedy frauds’. Banks are doing their best to improve this. Since the 1st of April, it is even mandatory for employees of Dutch banks to sign a vague list of ethical guidelines for bankers.
The CEO salary case is interesting, because it clarifies some things. First, it reveals that the CEOs in Dutch banks are as greedy as they were before, but they use arguments for it now. Theirs was: by raising the salary, they’d be able to attract more reliable leaders, and thus become more competitive on the bank market. Because why would someone do his best for something, if he or she is not paid over a million per year, right? That would be playing your cards wrong. Not only can we conclude that the Dutch bank leaders are greedy (but try to hide it), the market of bank CEOs remains focussed astronomical salaries. It makes sense, because herding astronomical numbers is an astronomical burden: you have to keep them all in your sight, else they run away.
This event also reveals the power of these banks’ clients, especially when amplified by a social media outburst. A single decision of self-enrichment led to such buzz and fuzz that the CEOs had to take it back. No juridical court involved, it was all angry mob. And an overplayed hand. The careers of some of the dudes up there are even on thin ice now. They are made aware again that contracts are a two-way thing, and they have signed an astronomical amount of them.
This was a tiny battle. I’m curious to see how much the power of the people is really worth. It was about some salaries this time, but what if more important decisions are at stake, such as resignation of the board, or structural reforms? Could consumer disobedience still put leaders on their backs?