Outrage after Peugeot chief sees €2.5m salary doubled

A decision by PSA Peugeot Citroen to double its chairman's salary to €5 million has sparked angry debate in France, with Finance Minister Michel Sapin on Tuesday qualifying the raise as "harmful".

Outrage after Peugeot chief sees €2.5m salary doubled
Employees demonstrate at a Peugeot Citroen plant in Aulnay-sous-Bois, northeast of Paris in 2013 before it closed as part of a reorganization plan. Photo: AFP
Carlos Tavares, the chairman of Europe's second biggest carmaker, earned €5.24 million ($5.8 million) in 2015, up from 2.75 million in 2014, company documents showed last week.
The company's supervisory board hailed Tavares for leading Peugeot through a restructuring process that moved it back into the black in 2015 with a net profit of €1.2 billion.
As criticism rose over the move, Sapin said the government, which has a 13-percent stake in the company, asked its representatives to vote against the salary increase.
Sapin told France Inter radio that if the state had a greater share “it would have been blocked.”
He also said that at a time when France's economy is faltering, the increase “is harmful, everyone can see it.”
“We are in a time when we need to make an effort, and it needs to be more or less shared. I say more or less because we are talking about figures that are so huge that one can barely comprehend what they mean.”
When the salary increase was announced Friday, the CFDT labour union slammed it as a decision which “causes a lot of damage to social cohesion”, adding that Peugeot employees had also played a role in turning the company around.
The company has said it would be paying out an average €2,000 bonus to French-based employees as a reward for the strong results.
Under Tavares' leadership Peugeot experienced a massive turnaround after posting a 555-million-euro loss in 2014.
Pierre Gattaz, head of the Medef employers' association, defended the move, saying: “When there is success, it does not shock me that we reward success.”
He said company leaders “are heroes”.
The head of the PSA supervisory board Louis Gallois said the salary increase was “not at all disproportionate”.

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Peugeot raided by fraud squad in emissions probe

French auto giant PSA Group, the maker of Peugeot and Citroen cars, said on Thursday its premises had been raided by France's anti-fraud squad as part of a probe into emissions.

Peugeot raided by fraud squad in emissions probe
View of the assembly line for Citroen C3 Picasso and Peugeot 208 cars by French car maker PSA Peugeot Citroen. Photo: AFP
“As part of ongoing investigations on pollutants in the automobile sector, today PSA Group has been the subject of a visit and a seizure by France's General Directorate for Competition Policy, Consumer Affairs and Fraud Control (DGCCRF),” PSA, France's biggest carmaker, said in a statement.
The fraud squad said separately that the raid was prompted by harmful emission “anomalies” found in three PSA car models during pollution tests triggered by a Volkswagen emissions cheating scandal.
Five PSA sites were raided, four in the Paris suburbs and one in Montbeliard, eastern France.
PSA said it was cooperating fully with the directorate, which comes under France's economy ministry, and confirmed the “compliance of its vehicles in pollutant emissions in all countries where it operates”.
Gilles Le Borgne, head of research and development at Peugeot Citroen, told AFP by phone that the investigators took away computers, which he expected would be returned on Friday.
“We are being completely transparent… we are clearly going to provide maximum collaboration,” he added.
Thursday's raid comes three months after a surprise probe at Renault, France's second-biggest automaker, as part of the government's drive to shed light on emissions practices by car manufacturers in the wake of the global emissions scandal at Germany's Volkswagen.
The German company has admitted it installed illegal software into 11 million 2.0 litre and 3.0 litre diesel engines worldwide, including VW, Porsche and Audi models, that intentionally masked the vehicle's real emissions levels during testing.
Volkswagen reached an agreement Thursday with US regulators to offer US owners of some 480,000 illegally polluting diesel cars options of “substantial compensation” and to fix the cars, or to buy them back.
In the latest scandal to rock the sector, Japan's Mitsubishi Motors admitted that it had also cheated, on fuel-efficiency tests.
The shock statement sent stock market investors fleeing, wiping $2.5 billion (2.2 billion euros) off Mitsubishi's market value in just two days.
Trade unions at PSA on Thursday showed their support for the company.
“We are very confident, this doesn't seem to be worrying the management,” said FO union representative Christian Lafaye.