French government warns Renault to change Ghosn pay deal – Financial Times

Carlos Ghosn, chief executive officer of Nissan Motor Co. and Renault SA, stands alongside a Renault Captur on the first day of the 83rd Geneva International Motor Show in Geneva, Switzerland, on Tuesday, March 5, 2013. This year's show opens to the public on Mar. 7, and is set to feature more than 100 product premiers from the world's automobile manufacturers. Photographer: Chris Ratcliffe/Bloomberg *** Local Caption *** Carlos Ghosn©Bloomberg

The French government has actually threatened to modification the law if the board of Renault does not amend the pay of chief executive Carlos Ghosn complying with a shareholder revolt last week.

On Friday, 54 per cent of investors in the French carmaker voted against Mr Ghosn’s €7.3m pay package — the very first time this has actually happened in France.

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But the vote was non-binding, and the Renault board decided to leave Mr Ghosn’s pay unchanged, issuing a statement that reiterated the “quality” of the company’s 2015 results.

On Tuesday, Emmanuel Macron, France’s economy minister, criticised “dysfunctional governance” at Renault and said that the firm had to prove to Much more restraint over pay.

“The board of Renault need to comply with again in the coming weeks to take in to account this vote, otherwise we will certainly be required to legislate,” he told the country’s parliament.

Mr Macron did not go in to detail regarding the sort of legislation However investors are pushing for binding votes on remuneration policy.

Before the vote last week, Mr Ghosn faced massive criticism from shareholders, including shareholder advisory firm Proxinvest, which recommended that investors reject the pay package.

Proxinvest said that shareholders ought to “block this uncontrolled remuneration”. It pointed out that Mr Ghosn received a divide pay cheque from Nissan, where he is additionally chief executive, which brought his total pay to €15m. It called this “excessive”.

The vote came as executive pay attracts renewed scrutiny in Europe, along with shareholder revolts across a range of sectors from engineering to energy.

Last month, BP was strike by the biggest investor rebellion among FTSE 100 teams in four years as quickly as chief executive Bob Dudley’s pay for 2015 was rejected in an advisory vote.

The French government, which commands regarding twenty per cent of voting rights in Renault, or regarding a quarter of votes cast at the shareholder meeting, voted versus Mr Ghosn’s package.

The vote and the threat of brand-new legislation is most likely to escalate existing tensions in between the French government and Mr Ghosn.

The say caused consternation at Renault last year as quickly as it bought €1.2bn in added shares in the firm to push through arrangements that would certainly provide lasting investors double voting rights.

According to individuals close to the situation, Mr Ghosn was enraged along with Mr Macron. He was particularly annoyed, claim the people, that the politician telephoned him or her just hrs Prior to activating the trade.

The government’s relocate to enhance its stake to practically twenty per cent exposed fundamental tensions in the alliance in between France’s Renault and Japan’s Nissan, best to a brand-new governance deal in between the two.

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