- The Washington Times - Thursday, March 26, 2009

PARIS (AP) - France will limit or ban bonuses and stock options for executives at companies bailed out with taxpayer money, an official announced Thursday, as the government scrambled to calm public outrage at what some see as the greed that caused the global financial crisis.

The French government plans to issue a decree next week “fixing the conditions under which stock options and bonuses are forbidden in companies which have benefited from state aid,” according to a television interview with Claude Gueant, President Nicolas Sarkozy’s chief of staff.

The French decree, which does not require parliamentary approval, would be effective immediately, Gueant said.

The measures are a response to rising discontent at executives cashing in bonus checks even as their companies are rescued with billions of euros (dollars) in public funds.

In the United States, similar anger is being directed at insurance giant American International Group Inc., whose executives received $165 million in bonuses after the company was kept afloat by $170 billion in bailout money.

Some French and American executives are responding to the public outcry by handing back their benefits.

On Thursday, striking French port workers pressured top executives at GdF Suez to give up their stock options.

Terminal workers from the powerful CGT union called the strike to protest the payout of 1.13 million stock options, disrupting activity at the company’s two liquefied natural gas terminals in France.

GdF Suez said in a statement later Thursday that the executives _ Chairman Gerard Mestrallet and Vice Chairman Jean-Francois Cirelli _ had decided to give up the stock options granted in 2008 “out of concern for responsibility.”

Earlier this week, four top executives at French bank Societe Generale, which took government bailout funds, gave up tens of thousands of stock options.

In the United States, New York Attorney General Andrew Cuomo said 15 of the top 20 bonus recipients at AIG agreed to return their money.

The French government is also opposing the euro3.2 million ($4.3 million) exit bonus paid to Thierry Morin, the former head of auto parts maker Valeo SA. The state owns 8 percent of Valeo, which also received state aid.

The political firestorm was so great that even the head of the main employer’s federation, Medef, urged Morin to hand back his check. Medef chief Laurence Parisot is treading a political tightrope, trying to diffuse public anger while also defending the executives she represents.

Sarkozy appears to have lost patience with Medef, which he asked to come up with new guidance on executive pay.

Parisot told a parliamentary hearing that she doesn’t have the power “nor the desire to impose anything on company bosses.”

“I have the impression that there was a little astonishment and disappointment” about Medef’s response, Jean Arthuis, head of the finance committee at the French Senate, told The Associated Press.

The government is also working on legal steps to force companies to share more of their profits with workers.

In other labor unrest, French workers released a manager of U.S. manufacturer 3M on Thursday after holding him hostage for two days in a labor dispute over layoffs.

Workers at a 3M factory in Pithiviers, south of Paris, locked manager Luc Rousselet in an office Tuesday, demanding better severance packages for those laid off and better conditions for those who keep their jobs.


Associated Press writers Laurence Pirot and Greg Keller in Paris contributed to this report.

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