French government threatens Renault on chief executive pay
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The French government threatened Tuesday to step in if the board of carmaker Renault fails to reconsider its decision to maintain the generous pay package of chief executive Carlos Ghosn.
The board maintained Ghosn’s annual 2015 salary at 7.25 million euros ($8.34 million), despite opposition from shareholders.
Economy Minister Emmanuel Macron told parliament: “The Renault board must meet again to draw the lessons from this vote.
“If it does not... in the next few weeks, we will be forced to legislate,” he said, without elaborating.
More than 54 percent of Renault shareholders had voted against the pay move on Friday, but the board ignored the result and rubber-stamped Ghosn’s salary shortly afterwards. More than 1.73 million euros of the package is in stock options.
The French government holds a 19.7 percent stake in Renault, and controls 20 percent of its voting rights.
The board said it had based its decision on “the quality of the 2015 results, with turnover of more than 45 billion euros, which was an increase of 10.4 percent”.
Renault declared net profit for 2015 of 2.96 billion euros, up nearly 50 percent, despite a hit from its Russian subsidiary Avtovaz.
The action by Renault shareholders comes against the backdrop of increasingly strident shareholder opposition to rocketing executive pay around the world.
Norway’s sovereign wealth fund, the biggest in the world, said Monday it would keep a close eye in the future on the pay of executives in the more than 9,000 companies in which it holds investments.