Executive payoff causes French election storm

11th April 2007, Comments 0 comments

PARIS, April 11, 2007 (AFP) - An 8.5 million euro severance payment given to a French aerospace executive met widespread criticism in France on Wednesday with presidential election candidates calling it a scandal.

PARIS, April 11, 2007 (AFP) - An 8.5 million euro severance payment given to a French aerospace executive met widespread criticism in France on Wednesday with presidential election candidates calling it a scandal.

Socialist contender Segolene Royal called on Airbus to withdraw its proposed 10,000 job cuts across Europe after the revelations of the money paid to former Airbus and EADS chief executive Noel Forgeard.

When he left last year, Forgeard was awarded 6.1 million euros in pay, more than two years' salary, and is also entitled to a non-competition indemnity package payable over two years worth 2.4 million euros, according to company documents released Tuesday.

Royal called the payments a "scandal" and a "provocation" as Airbus battles with major losses caused by delays to its new A-380 super-jumbo jet.

"Taking this information into account, I call on Airbus leaders to withdraw the whole plan so we can start afresh to see which job cuts are justified by the industrial strategy," Royal said in a French television interview.

The Communist Party candidate in the election, Marie-George Buffet, said that Forgeard had "hit the jackpot".

"How can a company give such a bonus to a boss who everyone agrees was a disastrous manager," she said in a statement.
 
The revelation of the severance package also drew criticism from a small shareholders group APPAC, which described the payments as "completely immoral" given a painful restructuring programme underway at Airbus.

"When a chairman destroys a company he should be punished," the group's chairman Didier Cornardeau said.
 
Forgeard stood down as co-chief executive of European aerospace group EADS last July. The pay figures were contained in documents sent to shareholders before the EADS annual general meeting on May 4.

He left the company because of the Airbus troubles and controversy over his decision to exercise share options just months earlier.

A former advisor to President Jacques Chirac, Forgeard had relied partly on the French leader's backing to wage -- and win -- a fierce leadership struggle at the European aerospace group that saw him named co-chief executive in 2005.

But a source close to Forgeard insisted that the payments linked to his departure stemmed from "the application of common law to the termination of contract and did not constitute a dismissal for an infraction."


Copyright AFP

Subject: French news

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