Frances new socialist government has launched a crackdown on excessive corporate pay by promising to slash the wages of chief executives at companies in which it owns a controlling stake, including EDF, the nuclear power group.
In a departure from the more boardroom-friendly approach of the previous right-of-centre administration, newly elected president François Hollande wants to cap the salary of company leaders at 20 times that of their lowest-paid worker.
According to Jean-Marc Ayrault, prime minister, the measure would be imposed on chief executives at groups such as EDFs Henri Proglio and Luc Oursel at Areva, the nuclear engineering group. Their pay would fall about 70 per cent and 50 per cent respectively should the plan be cleared by lawyers and implemented in full.
Mr Proglio earned 1.6m last year 65 times more than his lowest-paid worker.
The government also wants to pressure other companies in which it owns a stake to follow its lead, even though it has no legal power to force such a change.
France is unusual in that it still owns large stakes in many of its biggest global companies, ranging from GDF Suez, the gas utility; to Renault, the carmaker; and EADS, parent group of passenger jet maker Airbus.
Mr Ayrault said he believed in the patriotism of company leaders and their willingness to share the countrys economic pain. Mr Hollande and his ministers are taking a 30 per cent pay cut.
Demonstrating the governments eagerness to flex its muscles over boardroom rewards, Pierre Moscovici, the finance minister, said the state also plans to vote against a 400,000 payoff to the sacked chief executive of Air France-KLM at the companys annual meeting in Paris on Thursday. France owns 15.8 per cent of the struggling Franco-Dutch airline.
Mr Moscovici said the payment to Pierre-Henri Gourgeon did not live up to the standards of salary moderation and decency that Mr Hollande wants to impose. Air France is going through a painful restructuring that will entail thousands of job losses.
Louis Gallois, the departing EADS chief executive and socialist supporter, warned that the pay cuts were going to be steep for some bosses and that such crisis measures must only be temporary, including Mr Hollandes plan for a 75 per cent tax on yearly wages above 1m.
We need to be more flexible than that, he said, adding that it was best left to companies to fix salaries.
Pierre-Yves Gauthier of AlphaValue, a Paris-based corporate research group, said the measures could almost have been put in place to create pressure on Mr Proglio, whom some socialists would like removed because of his ties to Nicolas Sarkozy, the former president.
France to cap top pay in state groups - FT.com