As France struggles to resuscitate its moribund economy and squelch record unemployment, the bosses of its biggest banks have given themselves millions in euros worth of raises since last year. And Economy Minister Arnaud Montbourg is incensed.
Crédit Agricole’s boss Jean-Paul Chifflet is making €2.14 million, a jump of about 38.8 percent over last year. The boss at BNP, Jean-Laurent Bonnafé is pulling in €3.44 million, up by 8.1 percent from the previous year. While Société Générale’s chief Frédéric Oudéa is earning €2.7 million or 8.5 percent more than last year, French daily Le Parisien reported.
The millions in pay hikes prompted Montbourg to tell the Senate on Thursday he’s decided to invite the CEO’s to a “little meeting” where they will "explain themselves" on the topic of the “indecent” jump in their salaries, Le Parisien reported.
“We’re going to have to talk about all this with the banking industry,” Montbourg told lawmakers. “We cannot have a defective banking system and remuneration that soars to, in our view, disproportionate levels.”
No word yet from the banks on whether they consider the salaries indecent or if they’ll attend the gathering. However, the banks are not government-owned institutions and go pay their bosses what they wish.
The bosses paychecks generally must be approved by the supervisory board of their institution and shareholders. Their pay typically includes a fixed amount as well as bonuses based on the year’s results. While the fixed portion has remained stable, the bonuses have been climbing recently.
The French public is unlikely to be very tolerant of fat pay checks for executives, especially after Prime Minister Manuel Valls’ announcement this week of the most detailed account yet of how the government plans to trim €50 billion from its budget between 2015-2017.
Families, low-income workers and pensioners will definitely feel the pain. Valls said a freeze on cost of living raises for pensions, family subsidy payments and welfare recipients are likely coming.
The government tried to say they cuts don’t amount to “austerity” , an issue Socialist President campaigned against in 2012. But an expert told The Local the denials are a joke.
“There’s no doubt this is austerity because these measures will impact on the spending power of people. As soon as fiscal measures impact negatively on spending power then that is austerity,” economist Eric Heyer, from the French Economic Observatory told The Local on Thursday.