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Business France

Two BNP executives to forego bonuses

Video by Richard TOMPSETT

Latest update : 2009-01-21

Both the CEO and president of French bank BNP Paribas will not take their bonuses for 2008 after Nicolas Sarkozy told banking executives they must forego any results-related bonuses from last year in exchange for state aid for the sector.

AFP - Executives at the helm of French bank BNP Paribas have agreed to forego their 2008 bonuses following conditions President Nicolas Sarkozy set for state aid this week, an official said Saturday.

BNP Paribas president Michel Pebereau and CEO Baudouin Prot told their board of directors they would not take their "variable income" for 2008, a spokeswoman for the bank told AFP.

The last bonuses Pebereau and Prot took amounted to 875,000 and 2.3 million euros (1.2 and 3 million dollars) respectively, according to BNP Paribas.

Sarkozy told banking executives Thursday they must forego any 2008 results-related bonuses in exchange for state aid promised to support the sector.

The president warned he would seek legislation to regulate executive pay unless business leaders' associations put in place their own voluntary controls by the end of the first quarter of 2009.

"We have to bring to an end the practices that have rightly angered the French people," he said.

The government would study a new package of state support, but this would depend on banks financing certain projects, limiting dividends to shareholders and restraining executive pay, Sarkozy said.

Some 10.5 billion euros are earmarked for France's six biggest banks, including BNP Paribas.

The French government has already offered up to 40 billion euros in capital to shore up its banks and keep credit flowing to the French economy.

BNP Paribas has been in troubled waters after losses in financial markets, a stalled deal to buy Belgian-Dutch banking group Fortis, and the scandal surrounding New York investment manager Bernard Madoff.

Date created : 2009-01-21