France will cap the salaries chief executives officers at state-owned companies, signaling a pay cut for Electricite de France SA’s Henri Proglio.
Salaries for the heads of state enterprises will be limited to twenty times the company’s lowest paid worker, Prime Minister Jean-Marc Ayrault said in an interview published yesterday on the website of L’Express magazine. The measure would apply to existing contracts and call upon the “patriotism” of corporate leaders in the face of the economic crisis, he said.
A cap could affect EDF’s Proglio as well as the heads of Aeroports de Paris, Areva SA (AREVA) and La Poste, according to the companies’ annual reports. The country’s minimum annual wage is 16,800 euros ($21,000), putting the proposed limit at about 336,000 euros.
Proglio earned 1.6 million euros in 2011. Aeroports de Paris (ADP) Chief Executive Officer Pierre Graff was paid 736,000 euros, Areva SA Chief Executive Officer Luc Oursel’s compensation was 679,048 euros while La Poste’s Jean-Paul Bailly was paid 626,174 euros.
Proglio, 62, told shareholders last week that his salary is determined by “objective criteria,” including results and nuclear power production. EDF shares dropped 39 percent in Paris last year. The state owns 84 percent of the company.
EDF’s 58 French reactors provide more than three-quarters of the nation’s electricity, a higher proportion than in any other country. Proglio has headed the utility since November 2009 after being named by the former government.
He came under fire during the presidential campaign from advisers to President Francois Hollande, who questioned Proglio’s support of incumbent Sarkozy and said his attitude during the campaign had been “totally abnormal.” Hollande’s team also criticized EDF salaries for top managers as “scandalous.”
Ecology, Sustainable Development and Energy Minister Nicole Bricq hasn’t yet outlined her plans for EDF. She is scheduled to meet with Proglio on June 1 in Paris.
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