€19 million. This is the remuneration that Carlos Tavares, head of Stellantis, a former PSA group, will receive for the year 2021. No less than 47 million euros in premiums could be added to this sum, for a total of 66 million euros. And this despite the advisory vote of the shareholders of the company based in the Netherlands. Gathered in a general assembly, in effect, more than 52% rejected the idea that the French leader receive this remuneration.
A record amount for a French leader, and one that questions the way high salaries are framed.
Are executive salaries capped in France?
In France, only the salaries of the bosses at the head of public companies are capped. Since 2012, the remuneration of the directors of public companies cannot exceed 450,000 euros per year, or just over 37,500 euros per month.
On the other hand, in the private sector the situation is quite different and leaders can “set the remuneration as they see fit”, explains Charles Pinel, associate director of Proxinvest, a consultancy that annually publishes a ranking of the affected remunerations. by business leaders. Simply put, “there is no limit.”
Are wages in the private sector still regulated?
Even if there is no ceiling in France, “there are control mechanisms”, emphasizes Charles Pinel. “The main thing is quite powerful: it is the general meeting of shareholders that must approve the remuneration of the executives,” he continues.
Indeed, if in the Netherlands the shareholders of Stellantis could not force Carlos Tavares to accept a lower remuneration, in France “the vote of the shareholders is binding”, says Charles Pinel. In fact, “all the elements of the variable remuneration attributed to the manager cannot be paid if it has not been approved by the general meeting”, he adds. In other words, if Stellantis had its headquarters in France, Carlos Tavares would not be entitled to receive his variable part of 47 million euros if his shareholders had objected.
In addition, “large companies refer to the AFEP/MEDEF code of good governance”, specifies Charles Pinel, that is, a set of recommendations prepared by the French Association of Private Companies (Afep) and the Movement of French Companies (Medef) . Among them are the recommendations on high salaries, which stipulate that the remuneration of top business leaders should be measured. “But recommendation is not obligation,” says Charles Pinel. Again, nothing binding, therefore.
Who are the best paid managers of large French companies?
According to Proxinvest’s 2021 annual report, published last November, it was the CEO of Dassault Systèmes, Bernard Charlès, who received the highest remuneration in 2020 (20.6 million euros in total), ahead of Daniel Julien, CEO Teleperformance (17 million) and Mike Manley, former director of FCA (Fiat Chrysler), with 14.9 million euros. Last November, Stellantis had not communicated the remuneration of Carlos Tavares.
The lowest paid boss of the 120 largest French companies was a woman, Stéphane Pallez, CEO of La Française des jeux, with 380,000 euros.
Are the salaries of French leaders disproportionate?
“Scandalous and excessive”, this is how Emmanuel Macron designated the remuneration of Carlos Tavares this Friday. For good reason: according to Loïc Dessaint, president of Proxinvest, which has been studying the remuneration of French business leaders for 25 years, the head of Stellantis is “the highest paid in history”, he explains to franceinfo.
Charles Pinel confirms this monstrous remuneration:
On average, the amount of remuneration of CAC 40 companies is around 4 to 5 million euros. There, at least, the head of Stellantis will be close to 19 million. And this is a very high amount compared to comparable European companies.
Note that in the United States, the big bosses are even better paid, with an average of 15 million euros a year.
Is it possible to imagine limiting mechanisms?
This Friday, Emmanuel Macron spoke out in favor of remuneration “ceilings” for big bosses at the European Union level. “We must fight in Europe so that we have a remuneration that cannot be abusive,” said the President of the Republic, who is running for re-election on April 24, on the set of Franceinfo. “Otherwise, society, at some point, explodes,” added the head of state.
This does not mean that if he is re-elected, Emmanuel Macron will promote this issue at a European level. “There are regular scandals, sums that jump to the headlines. In these cases, politicians, and even more so during an election, take up the issue and threaten to cap or establish a system that would limit remuneration,” said Charles Pinel.
Since Covid, the salaries of the big bosses go up again
At the beginning of the Covid-19 epidemic, in 2020, “many managers played the game of not paying themselves a fixed salary or lowering their variable part, and therefore lowered their remuneration. Which is quite positive”, recalls the associate director of Proxinvest.
Specifically, in 2020, the remuneration of senior managers decreased by 14% compared to the previous year for the 120 largest listed companies in France.
On the other hand, two years later, “we see a rapprochement with many leaders who significantly increase their compensation,” he specifies. A rise that should be observed at the end of the year, with the publication