France angry about PSA chairman′s salary hike | Business| Economy and finance news from a German perspective | DW | 29.03.2016
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France angry about PSA chairman's salary hike

A decision to double the salary of auto maker PSA's chairman has sparked a heated debate in France. The nation's finance minister qualified the raise as "untimely and harmful." Others insisted it was a justified move.

Corporate documents had shown PSA Chairman Carlos Tavares was granted a salary of 5.24 million euros ($5.58 million) last year, up from just 2.75 million euros in 2014.

French Finance Minister Michel Sapin told France Inter Radio Tuesday the doubling of Tavares' income was harmful," given the problems the Europe's second-largest carmaker had been facing for years and given the general state of the French economy.

Sapin made it clear that the government, which held a 13-percent stake in PSA, had asked its representatives to vote against the salary increase, but they'd been unable to block the decision.

"At a time when France's economy is faltering, the salary increase is harmful, and everyone can see it," Sapin told reporters.

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Immediately after the announcement of the hike, the CFDT labor union slammed the decision as one "causing a lot of damage to social cohesion," adding that Peugeot employees had made a vital contribution to turn the embattled carmaker around.

Other PSA board members said the reward for Carlos Tavares was justified, emphasizing that he'd led the company back into positive territory with a net profit of 1.2 billion euros in 2015 - after PSA logged a 555 million-euro loss in 2014.

The head of the Medef employers' association, Pierre Gattaz, also defended the move, saying that "when there's success, it does not shock me that we reward success." He called the company's leaders heroes.

As a result of a large-scale restructuring campaign, several thousand PSA workers had been laid off, while those remaining had to put up with a wage freeze.

PSA executives have indicated that France-based employees could look forward to an average 2,000-euro bonus for the strong 2015 results.

hg/cjc (AFP, Reuters)

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