Candice de Monts-Petit on recent shareholder unrest in France
The shareholder spring is spreading throughout Europe and it seems France is no exception, with unrest over executive pay evident at the AGMs of French companies like Air France-KLM, Safran and Publicis Groupe. Until now this type of investor activism has been uncommon in France: traditionally, employees and unions have been far more vocal than shareholders.
But now Carrefour, the world’s second-largest retail group, is facing protests from shareholders over the new CEO’s stock option allowance and his predecessor’s severance payments. The company’s remuneration report was strongly criticised by voting advisers ISS, ProxInvest and PhiTrust for proposing to grant a €1.5 mn ‘non-competition indemnity’ to outgoing CEO Lars Olofsson, who is retiring. He will also enjoy an estimated €500,000 annual pension. Carrefour’s share price has plunged 43 percent during his mandate and the retailer, whose profits fell more than 14 percent last year, is planning to divest some of its international operations.
At the 18 June AGM the resolutions on both pay packages were passed by a meagre majority. However, two other extraordinary resolutions granting stock options and free shares to new CEO Georges Plassat and to management and employees of the company were blocked by shareholders. Mr Plassat’s pay package was deemed excessive by ProxInvest. His basic salary is 50 percent higher than the average CAC40 CEO’s and is supplemented by his contested bonus share plan with an uncapped stock option allowance.
