Skip to comments.France to cap executive pay at €450,000 ($564,000) for state firms
Posted on 06/13/2012 9:09:10 AM PDT by Olog-hai
France's finance minister today announced plans to limit executive pay at state-owned companies to 450,000 (US$564,000) a year.
He called the measure a matter of justice and morality.
The pay cap delivers on a campaign-trail promise by France's new Socialist President François Hollande, who sought to tap widespread public anger over executive salary packages.
It will take effect in 2012 or 2013 depending on the company, Finance Minister Pierre Moscovici said.
"Earning 450,000 a year doesn't seem to me a deterrent if we want to have quality men and women at the head of our companies," Moscovici told a press conference after a cabinet meeting where he presented plans for the cap.
The minister said the measure was needed to "make state companies more ethical" and respond to "the demands of justice and transparency" at a time of economic crisis.
The cap will apply to all companies in which the state holds majority ownership, including the postal service, nuclear power giant Areva, electric utility EDF, railway company SNCF and public transport operator RATP, the cabinet said in a statement.
The measure is meant to hold executive pay to a maximum of "20 times the average of the lowest salaries at the main state companies", the statement said, but did not give details on which workers' salaries would be used for comparison.
(Excerpt) Read more at rte.ie ...
The Enarques, graduates of France’s elite École Nationale d’Administration, who run the country will not be happy. Any talented French CEO types one can hire on the cheap?
Yeah, that’ll get the ‘Best and the Brightest’ beating down their doors................TO LEAVE!!!!!
Just wait until they cap the maximum the peons who voted them in can earn as well. This is why it is not a good idea for the state to own businesses.
Planning economies for the usual “social good” reasons has been tried many many times before. A very short investigation will show that it ALWAYS leads to bad results. Apparently, the Frogs aren’t interested in 5 minutes of research before blowing billions of dollars.
Not sure if capping top pay is a good idea. However there should be a cap on the ratio of top pay and bottom pay. If an outfit is doing well, ALL employees should benefit, not just the CEO’s. Everyone contributes in a successful outfit.
Where do I sign ?
$564,000 per year?
Hell yeah, I’ll take it! That’s good money no matter where you are. Even Tokyo!
Here in the Czech Republic, I could buy a mansion with that kind of dough. No joke. A family home around here, about 1300 square feet, goes for about $50,000.
What absolute rubbish. What are you even doing on this site?
Here are two WAY better ideas:
1) A Constitutional amendment prohibiting the government from passing ANY law regarding prices and wages.
2) If you work at a large company and you think that the CEO is making too much relative to what you're making, QUIT YOUR FREAKING JOB and go find a higher-paying one elsewhere?
If you owned a dozen McDonalds restaurants, you’d make about $564,000 a year.
Is that the caliber of leadership that France wants to run its power companies, auto manufacturing, or Airbus?
When they impose a cap on businesses not owned by the state you’ll see the exodus begin.
They should cap politician/bureaucrat pay at $3.35 an hour, no benefits or overtime. I know it is unlikely that those jobs will get filled, but it might be a nice change for those of us living in the real world.
As long as it’s for government jobs only, I can’t complain too much.
As for PRIVATELY owned businesses, you are 100% correct.
Wonder what the person running AMTRAK makes.
I was talking about privately owned businesses. Obviously, the government should set the pay levels for any government employees.
I speak from first hand experience. I had a corporate executive position and was paid way more than was necessary, along with my colleagues at executive level. The ratio of our CEO compensation to the lowest level draftsman was around 100 which was way out of line with what each contributed. This outfit produced very sophisticated mass production machinery for automotive and appliance industries, and the CEO was an accountant with very limited technical knowledge.
I live in the corporate world and routinely deal with sr. executives at Fortune 1000 companies as a competitive strategy consultant across a broad range of industries.
So what if the CEO made 100 times what the lowest level draftsman?
How about you work your way up to CEO and then change the payment structure? Otherwise, who are you to decide that there is a fair limit to the range between a CEO and a lower level employee? Is the company profitable?
Obviously, the company directors think the pricing is fair. Why should they pay a lower level draftsman more than the market rate?
And why shouldn't the CEO negotiate the best rate he can with the directors, who certainly will not pay the CEO more than market value, or the value of his skills, talents and experience? And if they figure it wrong, and overpay the CEO, their own company suffers. If they are consistently wrong in other areas of the business, the company will be forced to close, and the resources it consumes will be available for more profitable enterprises.
It's called free enterprise. Do you get the concept?
Are you really saying that the government ought to decide what's "fair" and force the company to cap the CEO wage and place a minimum wage floor for the draftsman?
Are you really espousing that? A century of watching governments on every continent try to set wages and prices has produced nothing but horror and poverty everywhere it's been tried. Don't you know that the collapse of Europe is the inevitable result of this type of government meddling, and that we are watching it unfold before our eyes?
Are you unfamiliar with the Invisible Hand and the Broken Window?
Do you call yourself a conservative? Really?
In his first inaugural address, March 4, 1933, the President said: “Values have shrunk to fantastic levels; taxes have risen; our ability to pay. has fallen;... the withered leaves of industrial enterprise lie on every side..... Yet our distress comes from no failure of substance.... Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply.
.....Practices of the unscrupulous money-changers stand indicted in the court of public opinion, rejected by the hearts and minds of men.... They know only the rules of a generation of self-seekers.... Yes, the money-changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of that restoration lies in the extent to which we apply social values more noble than mere monetary profit.”
There was the pattern and it never changed. The one enemy, blameable for all human distress, for unemployment, for low wages, for the depression of agriculture, .... for want in the midst of potential plenty who was he? The money-changer in the temple. This was a Biblical symbol and one of the most hateful....
..... “We cannot go back to the old order,” said the President. And this was a very hateful counter symbol, because the old order, never really defined, did in fact associate in the popular mind with the worst debacle in the history of capitalism.....
Large profit as such becomes therefore a symbol of social injury, merely because it is large; moreover, it is asserted that large profit had long been so regarded by the government and penalized [higher taxes] for that reason.
Of all the counter symbols this was the one most damaging to the capitalistic system. Indeed, if it were accepted, it would be fatal, because capitalism is a profit and loss system and if profits, even very large profits, are socially wrong, there is nothing more to be said for it. But it was a false symbol, and false for these three reasons, namely: first, there is no measure of large profit; second, large profits are of many kinds and to say simply that large profits are “of course made at the expense of the neighbors” is either nonsense or propaganda, as you like; and; in the third place, the history is wrong.
Oops - meant to include you to post #19.
Here is the crux of the problem..the board of directors are HAND PICKED by the executives and on a first name basis with them. Of course they get their generous stipend for attending meetings, and they are never going to bite the hand that feeds them.
I know of only two categories of people in US who can set their own salaries...the elected congress & CEO’s.
CEO’s in China, India, S. Korea & Japan are getting paid more in proportion with other employees. Some of the US CEO’s are another story. Even CEO’s who have bankrupted their companies get multi-million dollar golden handshakes, one glaring example which I can still recall is K-Mart.