French finance minister Christine Lagarde has been putting the boot into some of France’s biggest firms, suggesting it’s ‘scandalous’ that top executives are getting big pay rises even when their companies aren’t performing. Her cage was well and truly rattled by an article in business magazine L’Expansion, which suggested that the bosses of France’s 40 biggest listed companies enjoyed a 58% pay hike last year, taking home a whopping €161m in salary, stock and dividends. ‘This type of rise, in firms which are sometimes not doing well, is absolutely scandalous,’ she harrumphed to French radio. Apparently she hasn’t been this cross since President Sarkozy made her work a 40-hour week.
Speaking of the pint-sized President, Sarko himself is the main driver of this crusade – he’s apparently on a mission to ‘moralise capitalism’ and this week has been encouraging French firms to divert more of their profits to the workforce (perhaps that will stop disgruntled employees from locking their managers in the office all weekend?).
The bad news for corporate bigwigs that it’s not just French chats gros who stand to lose out here. In July, France will take over the presidency of the European Union, and it’s planning to use its time at the top to push through EU-wide curbs to executive pay. It reckons there’s a growing appetite among Europe’s politicians for some kind of crackdown on executive bonuses, and it may have a point – Jean-Claude Juncker, the prime minister of Luxembourg (a country not exactly known for leaning on the super-rich) has already been raging against excessive corporate pay, calling it a ‘social scourge’, while the Dutch government is also trying to put a finger in the dam by introducing an extra tax on corporate bonuses.
Lagarde was quick to stress that she’s only worried about companies who hike pay when they’re doing badly – if you’re raking in big profits, you have carte blanche to fill your boots. ‘There is absolutely no problem when people succeed... Let them earn lots of money,’ she apparently said. With an attitude like that, it's amazing she ever got elected in France...