Hollande Slashes French CEOs' Pay

New prez Hollande will cap salaries at state-owned firms
By Mark Russell,  Newser Staff
Posted May 31, 2012 5:30 AM CDT
Hollande Slashes French CEOs' Pay
French President Francois Hollande waiting at the Elysee Palace in Paris, Tuesday May 29, 2012.   (AP Photo Jacques Brinon)

With France's new socialist president François Hollande moving in, it looks like sky-high CEO salaries are moving out, reports the Wall Street Journal. Hollande has promised to cap executive pay at the 52 companies owned or partially owned by the state, limiting them to a maximum of 20 times the lowest employee's salary. That could cause the CEO salary at Electricité de France to plunge from $1.98 million last year to an estimated $634,000 this year, and top pay at nuclear energy giant Areva to drop from $845,000 to $418,000.

Even Hollande himself is taking a hit, cutting his own pay 30% to $18,674 per month. And some business groups approve of Hollande's plan. "Social cohesion is at stake," says the head of Medef, France's leading business lobby. But she also noted that the cuts probably won't fly in the private sector. "We know very well that the US won't follow, and neither will the UK or Germany." From 2000 to 2010, CEO pay at state-owned firms increased an average of 15% a year, versus as little as 2% for regular employees. (More France stories.)

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