France Threatens Law to Cut Renault CEO Ghosn’s Pay

France is threatening to take legislative action unless the Renault SA board agrees to reduce CEO Carlos Ghosn’s compensation.

Last week 54% of Renault investors—led by the government, which controls 20% of Renault’s voting rights—backed a proposal to trim a planned €7.2 million ($8.2 million) payout to Ghosn for his work in 2015.

The nonbinding plurality was a first in France, according to the Financial Times. But the board, citing the company’s strong financial results, ignored the vote. On Monday it approved the full compensation package.

Finance Minister Emmanuel Macron promptly declared Renault’s board "dysfunctional” and demands it meet again to take the shareholder vote seriously. Paris-based Proxinvest, a shareholder advisory firm, advised investors to block what it called “uncontrolled remuneration.”

Last year Macron led a secret maneuver by the French government to boost its stake in Renault. The effort enabled the government to force Renault to accept the new Florange law that doubles voting rights to longtime investors such as the French state.

Macron also thwarted the Renault board’s proposal late last year to rebalance the ownership of the company’s alliance with Nissan Motor Co. and grant the Japanese carmaker voting rights in the partnership. The government later vowed not to interfere with Renault’s future business operations.