Doubling of Peugeot boss' pay drives angry debate
A DECISION by PSA Peugeot Citroen to double its chairman's salary to five million euros (S$7.6 million) has sparked angry debate in France, with Finance Minister Michel Sapin on Tuesday calling the raise "harmful".
Carlos Tavares, the chairman of Europe's second-biggest carmaker, earned 5.24 million euros last year, up from 2.75 million euros in 2014, company documents showed last week.
The company's supervisory board hailed Mr Tavares for leading Peugeot through a restructuring that moved it back into the black in 2015 with a net profit of 1.2 billion euros.
As criticism rose over the move, Mr Sapin said the government, which has a 13 per cent stake in the company, asked its representatives to vote against the salary increase.
Mr Sapin told France Inter radio that if the state had a greater share "it would have been blocked".
He also said that at a time when France's economy is faltering, the increase "is harmful, everyone can see it".
"We are in a time when we need to make an effort, and it needs to be more or less shared. I say more or less because we are talking about figures that are so huge that one can barely comprehend what they mean."
Economy minister Emmanuel Macron echoed Mr Sapin's comments in an interview published yesterday, saying he thought "Tavares was wrong to ignore the feelings of the French on this subject".
The chairman should "think on it further", Mr Macron added.
When the salary increase was announced on Friday, the CFDT labour union slammed it as a decision that "causes a lot of damage to social cohesion", adding that Peugeot employees had also played a role in turning the company around.
The company has said it would be paying out an average 2,000-euro bonus to French-based employees as a reward for the strong results.
Under Mr Tavares' leadership, Peugeot experienced a massive turnaround after posting a 555-million-euro loss in 2014.
Pierre Gattaz, head of the Medef employers' association, defended the move, saying: "When there is success, it does not shock me that we reward success." He said company leaders "are heroes".
The head of the PSA supervisory board Louis Gallois said the salary increase was "not at all disproportionate".