The outgoing head of France's loss-making, state-subsidised carmaker PSA Peugeot Citroen said on Wednesday he was giving up his €21-million golden parachute after outrage from unions and lawmakers.
"I have decided to give up the current provisions of my pension rights," Philippe Varin said at a press conference in the PSA headquarters.
Against a national background of record unemployment and many French workers being obliged to accept wage freezes to retain their jobs, Varin's payout had widely seen as an example of unacceptable executive largesse, and criticism had spanned the French political spectrum.
Peugeot announced on Monday that Carlos Tavares, the former number two at French rival Renault, would succeed Varin next year.
Varin said he made the decision to renounce his payout "considering the polemics this subject has sparked, (and) that the emotions in our country need to be united not divided today".
French President Francois Hollande immediately welcomed his decision.
"It was a wise decision, that is the least one can say," Hollande said during a visit to Spain.
He added "it was also the only possible one given the situation of the company, the efforts – not to mention the sacrifices – Peugeot employees have been asked to make, and also taking into account the guarantee given by the state" to prop up the carmaker's loan arm."
Varin's decision came after news of the pension had provoked outrage among trade unions, who have battled in recent years against job cuts and factory closures at the firm.
To ensure the golden handshake of Mr Varin, PSA has already set aside for him the modest sum of €20.9 million ," the CGT union said in a statement.
Jean-Pierre Mercier, a trade union member from the Peugeot plant in the northern Paris suburb of Aulnay which is being shut down, had said the sum was "shocking".
"Of course he must forsake it," he told the LCI television channel.
Former minister Bruno Le Maire from the opposition centre-right UMP party of ex-president Nicolas Sarkozy said the sum was deeply inappropriate.
"To leave with a pension of this magnitude when one has failed as the head of Peugeot, when one has not been able to save jobs, when one has asked employees to make sacrifices, I find all this simply indecent," he said.