France to draft law against 'golden handshakes'

18th May 2007, Comments 0 comments

TOULOUSE, France, May 18, 2007 (AFP) - A law will be drawn up to do away with "golden handshakes" compensating top executives when they step down, new French President Nicolas Sarkozy said on Friday, referring specifically to companies in which the state is a shareholder.

TOULOUSE, France, May 18, 2007 (AFP) - A law will be drawn up to do away with "golden handshakes" compensating top executives when they step down, new French President Nicolas Sarkozy said on Friday, referring specifically to companies in which the state is a shareholder.

"I hope we will be able to outlaw the practice of golden handshakes," Sarkozy told trade union representatives during a visit to the headquarters of the European planemaker Airbus in this southwestern French city.

His remark follows renewed controversy over huge departure compensation for a former top executive of EADS, which owns Airbus.

"A double standard is dishonest, it's unfair. A company that has the state as a shareholder must respect more marked ethical rules than others," Sarkozy said.

The measure would be part of a draft "ethics and morality" law proposed in the coming months by Economy, Finance and Employment Minister Jean-Louis Borloo, Sarkozy said.

In July 2006, Noel Forgeard, the former chief executive at Airbus' parent company EADS, stepped down following revelations of serious and financially damaging production delays to the Airbus A380 superjumbo program.

Forgeard received a severance package of 8.5 million euros (11.5 million dollars) which, combined with a major restructuring at EADS that is to cost around 10,000 jobs, raised howls of protest among workers at the aerospace group.

On Tuesday, the German co-CEO of EADS, Thomas Enders, complained that the French government had strong-armed the group's board on the matter.

"In some ways, the French government twisted our arm," Enders told the German daily Frankfurter Allgemeine Zeitung.

EADS' board of directors rubber-stamped Forgeard's golden handshake and pensions, but "that was under pressure from the French government," Enders said.

On Monday, press reports said that Airbus managing director Jean-Paul Gut also planned to leave the company with a severance package worth at least 12 million euros following more than 20 years of service.


Copyright AFP

SUbject: French news

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