PSA’s chairman should not get a salary boost, the French government says

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The French government does not want to approve a sharp increase in compensation for the chairman of Peugeot-Citroen, according to a report from a local financial newspaper.

The French government, which has a 14 percent stake in PSA Peugeot-Citroen, wants to make some budget cuts and it has suggested that companies in which it invested should cut their leaders’ paycheck by as much as 30 percent, the local Les Echos financial daily reported this week. Therefore, the state strongly opposes a boost in remuneration for Carlos Tavares, chairman at France’s largest automaker. The head of PSA was compensated by 5.24 million euros (5.9 million dollars) last year, including his fixed and variable salary and long-term incentives, up from 2.75 million euros in 2014, according to the company’s annual report.

Peugeot-Citroen has completed its turnaround plan ahead of schedule and now the French auto group is back on profit. The Group was until recently in a deep financial crisis, reporting big loses from 2012 to 2014 and it had to be rescued by the French government and by China’s Dongfeng, each buying a 14 percent stake in the company. And the revival plan put together by PSA’s Chief Executive Carlos Tavares seems to have worked. The former executive at Renault managed to deliver its objective of restoring the profitability by cutting labour costs and inventory, closing a plant and shrinking the model line-up.

Via Reuters