Huff, puff and bluff in EU executive pay row
Written on June 16, 2008
“Scandalous”, “totally irresponsible”, “shocking”, “a social scourge”.
European finance ministers cannot find words harsh enough to describe executive pay packages, stock options and handsome payoffs for failed CEOs.
Stories of giant severance payments for top bosses and a tax evasion scandal involving the super-rich and one of Europe’s micro-state havens, Liechtenstein, have embarrassed governments trying to curb wages rises amid soaring oil and food prices.
“We are aware of the huge gap between our continued appeals for wage restraint and the continued existence of these excesses by certain captains of industry,” Jean-Claude Juncker, chairman of the 15 euro zone finance ministers, said last month.
The French business magazine L’Expansion reported last month that the combined earnings of the chief executives of the country’s 40 top listed companies rose 58 percent last year to 161 million euros ($247 million).
While modest by U.S cash advance loans. or British levels, the figures prompted Finance Minister Christine Lagarde to complain: “This type of increase, in companies which are sometimes not in great health, is perfectly scandalous.”
Ministers asked the European Commission to study executive pay and recommend measures which EU states can take to counter perceived abuses such as “golden parachutes” for departing executives.
Shareholder activists in some EU countries, notably Britain, are starting to challenge severance payoffs that appear to reward failure and share grants not linked to results.
Filed in: technology.