GDF Suez SA (GSZ), owner of Europe’s biggest gas network, cut its top executives’ bonuses in 2012 amid poor results and as the government clamps down on executive compensation.
The variable portion of Chief Executive Officer Gerard Mestrallet’s compensation was set at 1.6 million euros ($2.04 million), 5.2 percent lower than the previous year, while that of Vice-Chairman Jean-Francois Cirelli’s was almost unchanged at 842,036 euros, according to the company’s annual report.
The levels were set by the board “in the context of a difficult environment,” the document states. The move, La Lettre de L’Expansion reported yesterday, was at the request of board members representing the state, the single biggest shareholder of the utility.
The French government has promised a new law in the coming months on executive pay at companies, which comes after Swiss voters this month approved a so-called “fat cats” regulation that gives shareholders a binding say each year on such compensation. French President Francois Hollande last year capped the remuneration of the heads of state-owned companies, a move that shrinks Electricite de France SA CEO Henri Proglio’s annual pay to 450,000 euros from 1.6 million euros.
Mestrallet and Cirelli’s fixed compensation will remain unchanged from 2011 at 1.4 million euros and 1 million euros respectively, the annual report says. GDF Suez is 34 percent owned by the French government, which has four representatives on the utility’s board. Jerome Chambin, a spokesman for utility, declined to comment on the executives’ pay.
GDF Suez reported a 61 percent drop in 2012 profit.
Finance Minister Pierre Moscovici confirmed today in an interview in Le Parisien that a law is being planned on compensation and corporate governance because of “sometimes intolerable” excesses that need to be corrected.
The law won’t include a cap on salaries, although rules may require worker representation on boardroom compensation committees, he was quoted as saying.
Renault SA (RNO) Chairman Carlos Ghosn should make a “gesture” on his salary, according to the minister. Moscovici’s comments aren’t first time the government has taken aim at the Renault executive. The state owns about 15 percent of the carmaker.
“The state, as a shareholder, is carefully watching the remuneration of the top manager,” he said in January. The Renault press office didn’t return a calling seeking comment.
Under pressure from former President Nicolas Sarkozy, some French corporate executives, including Mestrallet and Cirelli, renounced stock options for 2008 compensation.
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