typically.nl

Netherlands is flat. Real, real flat. Not only the country, but also the minds of its inhabitants. We really don’t like things ’sticking out’, be they people, cars, mountains, sore thumbs or, as I will discuss now, salaries. It makes us uneasy. We’re not used to that.

A very current discussion in .nl is the so-called ‘Balkenende norm’ or Balkenende income cap. Named after our current prime minister, this income level is deemed a reasonable maximum for anyone working in the public sector. Go over it and you are sure to be chastised. The media first, but the people quickly following.

People from the USA might find it disturbing: this income cap is a very real thing in our country. Set currently at about 160.000 euros (230k US$) this is inevitably your maximum wage if you work in the public sector. It doesn’t matter if your (privatised) company makes billions and/or if you take huge risks. ‘We’ are paying you so ‘we’ feel to have a right to maximise your salary.

It’s a sentiment most citizens across the world feel at some point, but we have managed to make it a norm.

The current discussion in .nl rages about salaries paid to CEOs in the health sector. In the last years, small parts of healthcare have been privatised and deregulated. This has brought with it all the nasty bits of capitalism: bean counters, middle management, time sheets and directors with huge salaries. In the past years some CEOs have managed to earn millions off semi-public services like home care.

I have to admit, it’s a little exorbitant.

Sorry about this picture of prime minister Jan Peter Balkenende, but he is name saint of this norm after all

The Balkenende norm is not law. Directors, even of public services, cannot be held to adhere it (only ministers of parliament and such, since they earn less than the prime minister by default). But the public outrage simply forces these people to yield to it eventually. (Or leave for the private sector, which many do.)

Private sector

There even exists a comparable norm for the private sector called the ‘Code Tabaksblat’. Named after a boardmember of Unilever, this code does not maximise salaries to that of Balkenende, but it does set rules for corporate governance, including salary. Invariably, media like de Volkskrant (people’s paper) will cry outrage when some CEO has managed to rake in millions while the stock of his company is tanking. In contrast to public sector workers though, this seldom affects salary levels. Most recent example of this is the paycheck of Anders Moberg, temporary CEO of Ahold, who had to give up a large percentage of his salary. Which still left him with many millions, of course.