Govts close in on golden parachutes for bosses

Paris – When economic turbulence shakes companies off course and investors demand bosses’ heads, executives worldwide have long known what to do: yank the ripcord on their “golden parachutes” and sail to safety.

But in the global economic meltdown, governments are launching an assault on these multimillion-dollar severance packages – and already some executives are finding that the chutes no longer open. Under heavy pressure from government officials, the head of French-Belgian bank Dexia SA, Axel Miller, was forced to renounce a reported €3m payout when he was ousted last month.The bank had made bad bets on US investments, and only survived thanks to a €6,4 billion bailout from the governments of France and Belgium.In handing over taxpayers’ money, French officials insisted that Miller renounce his golden parachute.That episode snowballed into a movement in several countries against big payouts for fat-cat bosses who have led their companies to the edge of ruin.As the financial meltdown starts to infect the real economy, popular outrage has grown over the money thrown at executives when they leave -and leaders have responded.French President Nicolas Sarkozy last month railed that there had been “too much abuse, too many scandals” involving executive pay.His pressure has led to new steps to rein in payouts in France.In Europe, severance packages included: * Mannesmann boss Klaus Esser, who received a DM60 million mark payout after the German cell phone company was taken over by Britain’s Vodafone in 2000; * Noel Forgeard, former CEO of European aerospace giant EADS, who left with €8,2m in 2006, shortly after the maker of Airbus jets announced a series of costly delays to its A380 super jumbo jet programme.In France there are prohibitions on golden parachutes for executives who quit failed companies; a limitation on the size of golden parachutes for other executives to two years salary plus bonus; and an obligation that companies which offer stock options to top executives must also make arrangements for similar benefits to all employees.APUnder heavy pressure from government officials, the head of French-Belgian bank Dexia SA, Axel Miller, was forced to renounce a reported €3m payout when he was ousted last month.The bank had made bad bets on US investments, and only survived thanks to a €6,4 billion bailout from the governments of France and Belgium.In handing over taxpayers’ money, French officials insisted that Miller renounce his golden parachute.That episode snowballed into a movement in several countries against big payouts for fat-cat bosses who have led their companies to the edge of ruin.As the financial meltdown starts to infect the real economy, popular outrage has grown over the money thrown at executives when they leave -and leaders have responded.French President Nicolas Sarkozy last month railed that there had been “too much abuse, too many scandals” involving executive pay.His pressure has led to new steps to rein in payouts in France.In Europe, severance packages included: * Mannesmann boss Klaus Esser, who received a DM60 million mark payout after the German cell phone company was taken over by Britain’s Vodafone in 2000; * Noel Forgeard, former CEO of European aerospace giant EADS, who left with €8,2m in 2006, shortly after the maker of Airbus jets announced a series of costly delays to its A380 super jumbo jet programme.In France there are prohibitions on golden parachutes for executives who quit failed companies; a limitation on the size of golden parachutes for other executives to two years salary plus bonus; and an obligation that companies which offer stock options to top executives must also make arrangements for similar benefits to all employees.AP