France Escalates Bid to Trim Ghosn’s Compensation

The French government says it will force the issue if a business council fails to back a nonbinding vote by Renault SA shareholders to trim last year’s €7.2 million ($8.2 million) compensation package for CEO Carlos Ghosn.

French President Francois Hollande vows “there will be consequences” if the panel, which represents major employers in the country, doesn’t push Renault to roll back Ghosn’s planned payout.

Last month 54% of Renault shareholders supported a proposal to reduce payments to Ghosn of €1.2 million in salary, €1.8 million in performance-related pay and €4.2 million in deferred stock and bonuses. The initiative was led by the French government, which controls 20% of Renault’s voting rights.

But Renault board, citing the company’s strong performance in 2015, approved the original package anyway. Finance Minister Emmanuel Macron promptly declared the board “dysfunctional” and vowed to take legislative action to force a cutback. If the business council, which is reviewing the Renault board decision, allows it to stand, Hollande says his “first decision” will be to make shareholder votes binding on such issues.