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France scraps plan to limit fat cat salaries

The proposal was labelled by critics as another example of France's Socialist government attacking the richest. But after a u-turn announced on Friday the plan to limit executive pay in the private sector will not now see the light of day.

France scraps plan to limit fat cat salaries
A plan to cut fat cat pay in the private sector has been ditched. Photo: Images of Money/Flickr

The government’s controversial proposal to cap fat cat salaries in the private sector was supposed to be on the table “before summer” and was described last July by France’s Finance Minister Pierre Moscovici as "a law to regulate or prohibit certain practices that seem excessive”.

But the same Moscovici revealed on Friday that the government has now decided to ditch a bill, which would have mirrored measures already taken to limit the pay packets of the bosses of state-run firms.

“There will be no specific bill on corporate governance,” said Moscovici in an interview with Les Echos. The minister said he now prefers to use "dialogue" rather than the law to achieve the government’s aim of limiting salaries.

“We prefer to focus on self-regulation. But be warned, if there are measures taken that are not up to standard then we will reserve the right to legislate,” Moscovici added.

The move was both welcomed and ridiculed by France's opposition UMP party.

The deputy Henri Guaino, said it showed the Socialists had "once again lied."

"Even if salaries are often excessive, thinking we will solve this problem by a specific law is, in my opinion, absurd and the government has realized this," said the former adviser to Nicolas Sarkozy.

According to RTL, France’s highest paid executive is Maurice Levy, who is the boss of Publicis. Levy earns is reportedly on a pay packet of €4.8 million a year.

He is followed by Jean-Paul Agon who pulls in a reported €3.885 million and in third place is LVMH chief Bernard Arnault who is reportedly on around €3.79 million.

It is the second time the Socialist government has backed down on a measure aimed at targeting the county’s most wealthy after it scrapped its flagship plan to introduce a 75 percent tax bracket on top earners earlier this year. The government however insists it will go ahead with reformed plans to levy the 75 percent tax on salaries through the companies instead.

The minister announced the recent backpedal after holding a meeting with two powerful business unions Medef and the French Association of Private Companies (AFEP) who both say they are committed to building a code of “corporate governance”.

Moscovici, who insisted companies “are at the heart of  our economic policy” is promoting a new initiative titled “Say on Pay” which would allow shareholders to vote on executive salaries.

France has already taken steps to limit executive pay in state firms to €450,000 and has introduced a scale which bars the boss of a publicly owned firm from earning 20 times more than the lowest paid worker.

Moscovici's u-turn is unlikely to please the left wing of the Socialist party who are already peeved the 75 percent tax rate on those earning above a million francs has not made it into law, as promised by President François Hollande in his election manifesto.

The government now wants to levy the tax from companies rather than individuals but in a recent press conference Hollande announced that the tax change will be submitted to parliament in the 2014 budget.

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BUSINESS

France’s Mediawan buys majority stake in Brad Pitt’s Plan B

French media company Mediawan has bought a majority stake in US film star Brad Pitt's production house Plan B Entertainment, it said Friday, in a deal reportedly worth more than $300 million.

France's Mediawan buys majority stake in Brad Pitt's Plan B

Plan B, co-founded by Pitt in the early 2000s with his then-wife Jennifer Aniston has three best picture Oscar winners to its name: “The Departed”, “Twelve Years a Slave” and “Moonlight”.

The deal “marks the deployment of Mediawan into the American market,” the French company said in a press release which did not say how much the deal was worth.

The Financial Times reported the deal had valued Plan B Entertainment at more than $300 million.

“Cinema is becoming international. Talents are emerging all over the world,” Pitt said in an interview with Le Parisien newspaper. “For our future projects, we have to look outside the United States.”

With Mediawan “we have the same conception of how to produce films and series,” he added.

In a press release Mediawan CEO Pierre-Antoine Capton said the deal was “an exceptional opportunity to be able to develop Mediawan alongside Plan B, the most beautiful independent production company in the US.”

Founded in 2015 Mediawan produces and distributes films, series and streaming shows and has recently snapped up several production houses across Europe.

It produced the hit Netflix show “Call My Agent.”

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