The French government plans to step in and force Renault’s board to comply with firm’s shareholders’ decision of rejecting Carlos Ghosn’s compensation for 2015.
The majority of Renault’s investors have decided not to grant to chief executive Carlos Ghosn the 7.2-million-euro (8.12-million-dollar) pay package based on the automaker’s 2015 financial results. Despite this rejection, the board ignored the vote and approved CEO’s compensation of 1.23 million euros in fixed salary, 1.78 million in variable pay and 4.18 million in bonuses and stock, in addition to the 8 million euros he received as head of Nissan. Both the overall amount and the board’s decision have angered many French governmental officials and made them raise their voices. The French government is Renault’s biggest shareholder, with more than 18 percent of voting rights, or about a quarter of votes cast at meetings.
France is ready to take some actions, as a council on corporate governance comprising executives from major firms and representatives of the Mouvement des entreprises de France employers association will review the decision. France’s president also made public its opinions over the matter, saying that the situation is not acceptable. “I’ve been told there is a code of good conduct. If it’s not applied there will be consequences,” Francois Hollande said on Europe 1 radio. “If this council does not react firmly, the first decision will be to make general shareholder assembly decisions binding.”