The three largest asset managers in the Netherlands – APG, PGGM and MN – have drastically amended their variable pay arrangements following ongoing criticism and public debate about executive pay.

Performance-related pay for directors and managers has been largely abolished and replaced by a salary increase, the Dutch financial daily Het Financieele Dagblad (FD) has reported, while most of the variable pay for asset management staff has been reduced.

The €424bn APG, the asset manager for the civil service scheme ABP, changed its remuneration arrangements at the start of 2015. PGGM and MN decreased their performamce-related payments last year.

The reduction of variable pay was triggered by new legislation that limited the bonus for decision makers in the financial sector to 20% of the salary.

Although the restrictions did not apply to asset managers, the organisations went a step further, with PGGM stopping performance-based payments for 460 the 630 staff that were entitled to variable remuneration, the research found.

To compensate for the reduction in performance-based pay, salaries were increased by 50% of bonus levels, while variable pay for asset management staff was capped at 20% of the salary.

“We have cut bonus levels because of the discussion [occurring] in society,” the FD quoted a spokesman for PGGM as saying.

The fact that that asset manager regularly addressed companies for their high remuneration also played a role, he said. “We feel obliged to set the right example.”

However, PGGM still allowed for performance-related pay of up to 80% of salary for a “limited number of its own asset managers with specific investment expertise, who didn’t accept less”.

It also paid considerable performance-related fees to external investors, although it is trying to reduce these expenses, the spokesman said.

FD said that APG had compensated for the end of performance-related pay – until 2015 a maximum of 10% of the salary – by increasing the fixed salary by 5%.

However, some “key staff” were still entitled to a variable pay of no more than 20%, FD said citing an APG spokesman, who added that approximately 20 employees received variable pay of up to 60%.

The €110bn MN, the asset manager for the two large metal schemes PMT and PME, indicated that, when offered the choice, the full board of directors and all management staff had favoured a salary rise of 50% over the continued use of bonus payments.

Since then, no more than 57 of asset management staff were entitled to variable remuneration, which had resulted in a bonus of 12% on average last year, according to the FD.

It cited an MN spokesman who pointed out that MN had not stopped performance-related pay altogether, as it would be difficult to attract the right staff otherwise.

According to the FD, the board members of the pension providers had refrained from receiving bonuses earlier.

In other news, PGGM presented its new remuneration guidelines for portfolio companies “as a guidance for corporate pay practices and outcomes”.

Its central recommendation was that fixed salaries were a fair exchange for executing a job in a reasonable and responsible matter, according to Catherine Jackson, senior adviser on responsible investment.

Under the new guidelines, variable pay was only granted if employees and management at least met PGGM’s expectations for financial returns, and if companies´ decisions did not result in a negative impact on society and the environment.

The guidelines are to be implemented gradually over the coming years.

“We will also increasingly raise the issue with peers and colleagues, in order to continue to evolve our collective thinking on the important topic,” said Jackson.