After an outcry from government ministers and labor unions, the outgoing chief executive of French carmaker PSA Peugeot Citroen announced he would forego his pension package.
Even though the company is cutting more than 10,000 jobs as it struggles to recover from a six-year European market slump, PSA had set aside 21 million euros ($28.5 million) for Philippe Varin’s pension deal.
“Given PSA’s difficulties and given that the state has already underwritten (finance arm) Banque PSA Finance to the tune of 7 billion euros, we have asked for some very thorough explanations from PSA on the financial arrangements of his retirement,” Industry Minister Arnaud Montebourg said as he left a cabinet meeting.
“Given the immense respect I have for our staff and the consequences of the difficult but necessary decisions I had to take, I have decided to relinquish the present provisions of my pension package,” said Varin in a news conference.
Varin acknowledged the “polemic and emotion” caused by his pension and said the company’s supervisory board would decide on the new terms of his departure after consulting a corporate governance advisory body in the French employers’ organization.
The ministers and unions bristled at the fact that Varin, who will be stepping down three years before the end of his contract, would receive an annual 310,000 euros ($420,000) pension net of tax and social charges.