French banking group Credit Agricole has confirmed that its brokerage subsidiary Cheuvreux, where 31 French staff are being made redundant, paid bonuses for the year 2008 despite receiving state support. The bank plans to lower bonuses for 2009.
REUTERS - French brokerage Cheuvreux drew angry reactions on Wednesday over bonus payments amid a widening row in France and elsewhere about lavish executive pay during the economic downturn.
The Liberation daily said the broker, part of Credit Agricole, which like many of the world's biggest banks is receiving state support to help it through the financial crisis, would make 51 million euros ($68.8 million) in bonus payments to top managers.
The brokerage said the bonus payments were related to the year 2008 during which it made "satisfying" results despite a difficult end to the year.
It said payments for 2009 would probably be much lower.
But coming fresh after outrage over stock options for the top managers at bank Societe Generale and a golden parachute for the executive chairman of carparts maker Valeo, the bonus payments immediately came under fire. The secretary-general of the ruling UMP party, Xavier Bertrand, said he was shocked.
"It is not in their interest to touch these bonuses. Rewarding success is part of the values we need to have, but to reward failure? No way!" he told Europe 1 radio.
Government spokesman Luc Chatel, however, said bonus payments for traders was normal because their pay was structured in two parts, one fixed, the other related to sales.
Similar rows have erupted in the U.S. and Britain, where some banks and other firms at the heart of the global credit crisis have continued to pay bonuses despite being bailed out by taxpayers' cash.
Date created : 2009-03-25