France/Global economic crisis

Sarkozy decides to cut perks at state aided firms

Article published on the 2009-03-26 Latest update 2009-03-26 17:17 TU

Energy company protesters
( Photo: AFP )

French President Nicolas Sarkozy has announced plans to cut executive bonuses and stock options at firms that receive government money to stay afloat.

Days after a million workers marched against his economic policies, Sarkozy has announced a law that will stop bonuses and other perks being paid at companies that lay-off staff or take government money. France follows the lead of the Netherlands and Sweden, who have both taken steps to curb executive pay.

Public outcry has erupted across Europe and the United States in recent weeks over executive rewards at failed companies propped up by taxpayers. Executives at insurance giant AIG this week agreed to pay back 50 million dollars (37 million euros) in bonuses.

A number of events in the past few days have spurred Sarkozy’s government into action. The French President said that thousands of stock options awarded to top executives at the government-aided bank Societe Generale were “unacceptable”. The government also vowed to oppose the multi-million payoff given to Thierry Molin who is leaving the finances of auto supplier Valeo in tatters.

Sacked workers from a factory in Pithviers, France owned by US company 3M “boss-napped” a manager on Wednesday to get better terms for laid-off staff. The manager was released after 24 hours.

Thousands of workers at French energy firm GDF-Suez were on strike Thursday protesting stock options given to company bosses and demanding wage increases. The chairman and vice-chairman of the state-owned company have since agreed to give up their lucrative stock options, even though GDF-Suez has received no state aid.