American CEOs Laughing at French CEOs

Recently inaugurated Socialist President Francois Hollande has been executive pay should not exceed 20 times the salary of the lowest-ranking employees for companies owned or partially owned by the government according to new rules.

Now “France’s finance minister has declared a crusade against executive pay at state-controlled companies, describing a wage cap of €450,000 ($569,000) a year for bosses as a matter of ‘justice and morality,’” according to Dan Milno in The Guardian “The government expects to publish a decree on the pay cap next month. Turning the screw on executives, it will then introduce a bill in parliament later in the year to address stock options, so-called ‘golden parachute’ clauses and other components of executive salary packages.

Readers of CEO Payday will know even the pre-cut salaries of these CEOs are beneath consideration by American CEOs running companies of similar size. For most CEOs of major American companies, a salary of $569,000 is something you pay your brother-in-law.

The chairman and CEO of Electricite de France, Henri Proglio, will take about a 70% pay cut from his 2011 salary of €1,588,000 (approx. $2 million). The man who runs the electric utility for France will now earn just over $500,000.

  • Kevin Burke, CEO of Con Edison, New York’s electric utility, earns $10,965,000.
  • James E. Rogers, CEO of the Charlotte, NC electric utility Duke Energy, earns nearly 6x ($8,780,258) what poor Proglio earned before his pay cut.

Imagine the humiliation Luc Orsei must feel when he meets with his American counterparts. The CEO of Areva, the French quasi-public company which controls billions in mines and nuclear reactors, was already a poor relative earning €679,000. Now he, too, will be taking a pay cut.

  • What must Donald M. James, CEO of Birmingham, Ala. mining company Vulcan Materials Co. think? He earns $8,073,000. M. Orsei is about to earn barely 12x the average worker salary at Vulcan, which is $34,000. James earns $8 million more than most workers.

How can these French CEOs stand to continue working? CEO payday is full of reports of American boards of directors commonly paying $10-75 million “retention bonuses,” allegedly out of fear the CEO will jump ship for greener pastures. There may be some experienced French CEOs for hire. Paying them merely 5-10x what the will be earning could save U.S. companies serious money.

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1 comment for “American CEOs Laughing at French CEOs

  1. courant
    July 5, 2012 at 7:18 pm

    If I were an American shareholder/fund manager.. I would feel humiliated to be so blatantly ripped off by that bunch of overpriced under-performing toxic narcissists.. ‘the American CEOs’ By far the most expensive on earth… and, on top of it, they still manage to rip off extra tens of millions, even after being fired for gross incompetence … nothing to laugh about …

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