French government set to veto executive payoff at Air France-KLM
Published: May 31, 2012
France’s new finance minister Pierre Moscovici, is expected to vote against a €400,000 ($ 497,608) compensation package awarded to Pierre-Henri Gourgeon, former CEO of Air France-KLM.
Gourgeon was ousted in October last year, as increasing fuel prices sent profits nose-diving at the Franco-Dutch airline (ATW Daily News, Oct. 18, 2011).
In a statement, the Ministry said the government considered the indemnities and bonuses earmarked for Gourgeon, and approved by the previous administration, did not “fall within the rules of moderation and decent behavior” urged by the country’s new Socialist president, Francois Hollande. It said the state “expected exemplary conduct” in matters relating to pay for top executives, and in Air France-KLM’s case, especially at such a difficult time for the company.
As a result, Moscovici will be asked not to approve Gourgeon’s €400,000 payoff at the company’s annual general meeting May 31. The French government controls 15.9% of the airline.
The new government is expected to introduce new legislation soon on compensation for business leaders, in line with commitments announced by Hollande that include limiting senior executives’ salaries to a maximum of 20 times that of their lowest-paid employee.