Golden parachute for ex-Fortis boss stirs a storm in Belgium

2nd April 2009, Comments 0 comments

Media reports about 'golden parachute' pay-offs for former executives of bailed-out financial group Fortis stirred up a storm in Belgium on Tuesday.

BRUSSELS, March 31, 2009 (AFP) - Jean-Paul Votron walked away from the group he headed until he was forced out in July 2008 with a 6.3 million euro (8.3 million dollar) pay-out, according to Flemish language newspaper De Standaard.

According to the newspaper, he benefitted from a 2.5 million euro bonus for leading the purchase of assets from Dutch bank ABN Amro, a deal that saddled the group with so much debt it had eventually to be abandoned.

His farewell package also included 1.3 million euros departure bonus and another bonus of 1.9 billion euros for "adding value" to the group -- although its shares subsequently collapsed.

Crippled by debt and exposure to toxic US assets, the group was broken up in September and October with the Dutch, Belgian and Luxembourg governments taking over its main banking activities to avert its failure.

The head of the remaining rump Fortis Holding company, Karel De Boeck, said that "disproportionate" attention was being paid to Votron's pay-off.

"These indemnities were foreseen by a contract and money has already been paid," he said, as he announced that the holding company lost a stunning 28 billion euros last year.

After a series of scandals, the Belgian government decided in November to clamp-down on golden handshakes, limiting such pay-offs to the equivalent of 12 months of wages. However, the plan failed to make it into law.

Belgium's Francophone Socialist party, which is part of the ruling coalition government, called on Tuesday for the practice of golden parachutes to be ended.

In the absence of a ban, it urged Fortis' board to demand that Votron return his handout and recommended using tax measures to recover money paid to former executives at companies rescued by the state.


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