French state to block Valeo boss golden parachute
The government who holds an eight percent stake in the car parts supplier will oppose the severance payment worth EUR 3.2 million to outgoing boss Thierry Morin.PARIS – The French government vowed Tuesday to oppose a 'golden parachute' for the departing boss of troubled auto supplier Valeo at the centre of a fresh row over executive perks at crisis-hit firms.
Valeo's chairman and chief executive Thierry Morin, whose departure was announced on Monday, is to receive severance payment worth EUR 3.2million, the French newspaper Liberation reported on Tuesday.
Government spokesman Luc Chatel said the state, which holds an eight percent stake in the car parts supplier, "will oppose the payment of this golden parachute at the shareholders' assembly.
"The state has helped this firm and I find this kind of remuneration shocking in the current climate," Chatel told Europe 1 radio, calling on Morin to "accept his share of responsibility".
Valeo reported a net loss of EUR 207 million in 2008 after seeing sales plunge 27 percent in the fourth quarter as the global economic crisis slashed demand for cars.
In December, the firm announced plans to cut 5,000 jobs over the coming year, including 1,600 in France. Morin ruled out renegotiating the layoff plan early this month.
Valeo's board of directors said Morin was leaving his post as chairman and chief executive "in light of strategic differences" over the firm's direction after eight years at its helm.
Morin's contract stipulates that he is entitled to a payment equal to twice his annual salary if he leaves the firm over a strategic divergence, Liberation said.
He has been temporarily replaced as chairman by Pascal Colombani and by Jacques Aschenbroich as chief executive, the company said.
The government recently took a 2.3 percent stake in Valeo via a strategic investment fund set up to help French firms weather the global crisis. State financial institution, the Caisse des Depots, holds a further six percent.
AFP / Expatica