Pressure grows in France for law on executive pay

PARIS, March 25 (Reuters) - France's main business lobby group fought mounting calls on Wednesday for compulsory curbs on management rewards and bonuses as pressure grew for a law on executive pay.

Laurence Parisot, head of the employers' union Medef, faced sceptical deputies from the parliamentary legislative committee to defend a voluntary code on pay passed last year. he warned against "generalised declarations" over management pay.

"I think there have been abuses. There's no doubt about that," she said, but added: "Are we going to identify all possible abuses with a law? ... that's where I have doubts."

She also said that Medef itself had neither the authority nor the wish to impose standards on businesses.

"We are not a professional association. Our members have to maintain complete freedom of management," she said.

Parisot has been forced to tread a delicate course between placating public anger over big payouts to corporate bosses and defending the right of companies to make their own decisions.

Her appearance before the commission coincided with a fresh scandal over pay, after it emerged that executives of Cheuvreux, a brokerage unit of Credit Agricole (CAGR.PA), were in line to receive 51 million euros ($68.84 million) in bonuses [IDn:LP970247]

The Credit Agricole case followed a 3.2 million euro "golden parachute" claimed by the outgoing head of car parts maker Valeo and a separate scandal over stock options awarded to managers from Societe Generale, France's second-biggest listed bank.

In a speech on Tuesday, President Nicolas Sarkozy denounced excessive pay deals but stopped short of repeating threats he made last year to legislate against them.

Speaking after the weekly cabinet meeting on Wednesday, government spokesman Luc Chatel also said a voluntary solution would be preferable but parliamentarians facing angry constituents said a law was looking more likely.

"I think it would be much better if there weren't a law," Philippe Houillon, a deputy from the ruling centre-right UMP party and committee rapporteur on executive pay, told reporters after the hearing with Parisot. "But given that the problem is there and there is no satisfactory response towards finding another solution, I fear we are heading inevitably towards a law," he said.

Medef's voluntary pay code would prevent company directors from benefiting from the normal protections offered by standard employee contracts, end "golden parachutes" for failed managers and make it easier to see how much company directors make.

Parisot said that progress had been made and taken together, the voluntary rules would help uncover and correct any abuses but pressure has been growing for more concrete action.

Economy Minister Christine Lagarde wrote to Medef earlier this month to demand that by March 31, the employers detail "operational measures" to ensure the standards were enforced.

"This isn't an invitation, it's an ultimatum," Henri Guaino, a special adviser to Sarkozy told France Inter radio. "Either we get results by March 31 or the government will assume its responsibilities."