the runaway political and media days on executive pay has forced employers to get out of the wood. “We decided that the vote [on compensation bosses] should be imperative “ reported, Friday, May 20, Pierre Gattaz, President of MEDEF, and Pierre Pringuet, head of the French Association of private companies (AFEP). “The board must take into account the vote” patterns of shareholders in terms of wages if “negative” and “motivate decisions, “ said the two leaders.
in other words, explained Pringuet,” what is then the Board to make a proposal in case of voting negative . ” “ It is not conceivable that there is a lasting divorce between the board and the general meeting of a company ,” he added. A way for employers to give pledges to the government and public opinion. The question is whether that will be enough to appease the pressure: the AFEP-MEDEF code has no force of law and businesses that refer are freely
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Read also: Remuneration: shareholders are furious, English-speaking bosses raking
controversy swells since the outbreak of the “case Ghosn.” On 29 April, the Renault Board of Directors had decided to maintain the remuneration of its CEO, Carlos Ghosn – over 7.2 million – despite the shareholder advisory vote, which had 54% gave a negative opinion . Tuesday, May 17, on Europe 1, Francois Hollande called on employers the authorities to show “moral requirement” and said, “If nothing is done on the employer side” , this would be “the law to intervene” . “The first decision to be taken, (…) is that all decisions of the General Meetings shall be implemented immediately” , said the head of state.
“We have chosen initially to companies with their responsibilities . It is clear that this has not been respected. So now we need legislation “
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Thursday 19, Manuel Valls , interviewed on RTL, became even more pressing. “We have chosen initially to companies with their responsibilities , explained the Prime Minister. It is clear that this has not been respected. So now we have to legislate. “ The legislative vehicle is already found. The rapporteur of the Law Committee of the National Assembly on the bill on economic transparency, Sebastien Denaja (PS, Hérault), will file, in examining the text in committee on 25 May, an amendment to give effect to the decisions of the shareholders.
“the Government had proposed [2012] coaching, unconstitutional recalled Thursday Finance Minister Michel Sapin, traveling in Japan. since coaching is not possible, since self-regulation does not prevent a number of abnormal situations, it should legislate on methods attachment. “ The amendment has been drafted Denaja ” complete understanding “ with the 6 th floor Bercy.
The Tenant 3 th floor, Emmanuel Macron, shows him, from less. The Minister of Economy, in any event, is opposed to coaching salaries. “I think it is a bad subject to the law , he said Thursday. I do not think that Parliament, in one country, can consider in an open world that there is a wage ceiling. “ was in response to the article published the same morning in Libération and signed by forty personalities, the first secretary of the PS, Jean-Christophe Cambadélis, asking the government to ” legislate for a boss does not receive more than 100 sMIC “
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“the principle is to trust self-regulation”
Mr. Macron however continues to advocate for the “self-regulation” on compensation issues companies. “The challenge of ours is whether we want to control everything in our country by law or if we believe in what is called self-regulation, that is to say responsibility of those who have , has he developed. This is the economic world to show that he is worthy. “ Thursday, joined by Le Monde , the entourage of the Minister of Economy said wait the reaction of employers to decide on a possible legislative modification methods of governance. “the principle is to trust self-regulation , is specified. This is in light of this reaction we take position. “ The announcement of the AFEP and the MEDEF this Friday seems calibrated to meet this expectation.
Since 2012, under the leadership of Mr. Holland, bosses’ salaries public enterprises or majority owned by the state (EDF, La Poste, SNCF …) are capped at 450,000 euros per year. But self-regulation is still required in the private, even if the threat of a law is regularly agitated. A pressure regularly helps move the “code of conduct”, said AFEP-MEDEF code that sets the rules of corporate governance. He had until now no coercive power, only with a “high corporate governance committee” (HCGE), who reminds companies to order, if necessary.
Chaired by Denis Ranque, head of the board of Directors of Airbus Group (formerly EADS), the HCGE however hardened its attitude since Ghosn case. “The spirit of the code [...] and the principles of shareholder democracy dictate that the Board of Directors, after consultation of the major shareholders to better understand their expectations, decides to introduce significant changes in the method of compensation “ Ghosn, said HCGE Thursday, two weeks after having taken up the case. however he did not specify which “recommendations” he had made for the manufacturer. Renault on Thursday it refused to comment.
shareholder-relations Evolution
The Renault case is symbolic of a changing shareholder relations -leaders. “It should not be a genius to know that [a shareholder vote against the remuneration of an officer] would eventually happen,” says one in one of the staffs of the CAC 40. beyond the opposition of the state (which owns 19.74% of Renault), this is the position taken by the ISS American vote counseling agency that has tipped the balance against Mr. Ghosn: for the first time this year, it advised its major customers, insurers, pension funds or managers, to vote against executive compensation
Wednesday. 18, CEO of Total, Patrick Pouyanné, had called on the leaders to show “common sense” by accepting the advice of their shareholders on their salary. “For me, whether advisory or consultative not a general assembly decides, we should listen. [...] S i the general assembly of Total said no to the elements that the Board of Directors proposes to Patrick Pouyanné, I ask the board to revise the “ -t he said before the Committee on economic Affairs of the Senate. He however spoke against a law on the subject, which would pose a threat “ seats [social] companies leaves [s] . France “ the subject is far from over: a European directive intends to make the ” say on pay “ binding to 2018 within the EU.
Most
Advisory vote
The advisory vote shareholders on the salaries of bosses ( “say on pay”) is in force in nearly twenty countries (Germany, USA, Brazil, Spain, Australia …).
Vote binding
There are the Netherlands, Portugal, Norway, Sweden, Denmark and especially in Switzerland, which has the binding vote the most detailed (remuneration of senior management and of the Board).
mixed system
Since 2013, the UK, shareholders vote every three years so binding on the company’s remuneration policy and vote annually on an advisory basis from the salary of the last year
Read also:. Carlos “Imperator” Ghosn the head of State CEO
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