France to outlaw 'rewards for failure'

Apr 26 2005 by Brian Amble Print This Article

Following a national scandal generated by a Ä39m ($50m) pay-off to Daniel Bernard, the outgoing boss of the Carrefour supermarket group, the French government is introducing legislation giving shareholders the power to block 'rewards for failure' being paid to company bosses.

Bernard was forced out of Carrefour - the world's second-largest retailer - after a slump in its share price but still walked away with a Ä10m lump sum and a pension package worth a further Ä29.5m.

The scandal was the latest in a long line of similar episodes in which departing French CEOs pocketed sums which would make their English counterparts blush.

In response, France's finance minister, Thierry Breton, said in a TV interview that he was determined to introduce new rules on accountability to give shareholders the final say in whether such payouts could be made in future.

"As a citizen, I understand this emotion. Considering such extravagant amounts, relating to just one individual, of course France is agitated," he said.

And he promised new legislation to bring "democracy and transparency" to the awarding of such payments in future

"Henceforth, there will have to be a vote of general assembly so that all the shareholders, big and small, can express their opinion on the matter."