Renault Chief Carlos Ghosn's compensation is under attack from the French government, which believes it is too generous.
The French Government is taking aim at the compensation package of Renault Chief Executive Officer Carlos Ghosn claiming it is too generous.
The French currently owns 18% of Renault, making it one of the company’s largest shareholders and France intends to maintain pressure on Renault to place some checks on Ghosn’s pay, Economy Minister Emmanuel Macron told reporters after a meeting of Renault shareholders.
Shareholders, including the government of France’s Socialist prime minster, Francois Holland, voted against the chief executive’s 7.2 million euro ($8.3 million) payout for 2015.
In comments to lawmakers, Macron described Renault’s “dysfunctional governance,” after shareholders rejected Ghosn’s pay package on Friday – only to be immediately overruled by the carmaker’s board, according to Reuters.
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Ghosn also has expressed his displeasure with the state ownership stake in Renault and pressed the Holland government to sell off its shares – something the government has been reluctant to do.
Macron said the government may consider firmer steps to limit executive pay levels deemed excessive unless companies, such as Renault, show greater moderation.
While voting to maintain last year’s CEO payout, the board pledged to review its pay structure for 2016 and beyond. The government’s two board representatives consistently opposed Ghosn’s compensation proposal.
“What we are very clearly demanding is that Mr. Ghosn live up to his responsibilities with regard to his compensation for 2016,” he said.
(FCA’s Marchionne takes huge pay cut in 2015. For details, Click Here.)
The government will seek a further Renault board meeting to “draw the necessary conclusions”, Macron said. “Failing which we would be compelled to legislate.”
Ghosn’s total 2015 payout included 1.23 million euros in fixed salary, 1.78 million in variable pay and a further 4.18 million in deferred bonuses and stock. The compensation package from Renault was in addition to his salary as CEO Nissan, which last year amounted to 8 million euros. Renault owns 43.4% of Nissan’s share under a deal struck nearly two decades ago.
Ghosn’s total compensation is in the same range as his peers. Dieter Zetsche, CEO of Daimler AG, who faces constant pressure from activist shareholders in Germany, received a modest raise of 1.4% to 8.36 million euros.
Meanwhile, executives from scandal-ridden Volkswagen are facing demands for facing demands for pay cuts and even give backs from irate shareholders and German officials.
(To see what has automakers under fire and subject to increased scrutiny, Click Here.)
The total compensation for Mark Fields, Ford chief executive office, received $18.6 million for his first year as the maker’s CEO. GM’s Mary Barra collected a total of $28.6 million and Fiat Chrysler Automobiles CEO Sergio Marchionne earned total $11 million in 2015 after earning $38 million in salary and bonuses in 2014 for completing the integration of Chrysler and Fiat.