April 10, 2013 / 7:26 AM / 5 years ago

France Tel CEO would take pay cut if wealth tax passes

PARIS, April 10 (Reuters) - The chief executive of state-backed France Telecom said he would take a pay cut if the French government follows through on a plan for companies to pay a 75 percent tax on executive salaries above 1 million euros, Le Figaro newspaper reported.

“If the law is adopted ... I will make sure my pay is reduced below the 1 million euro mark,” Stephane Richard told the French newspaper in its Wednesday edition. “I would not want France Telecom to have to pay this tax on my salary.”

The pledge, the first by a boss of a state-backed company, suggests Richard wants to shield the company from the tax, while sending a message that France Telecom does not award excessive pay to its top managers.

The company’s profits fell last year as it suffered growing competition in its home market.

Socialist President Francois Hollande is battling to win back support after being forced to cut France’s budget targets less than a year after his election.

His government suffered a blow when a court overruled a plan to tax personal incomes above 1 million euros at 75 percent. It has now proposed shifting the planned wealth tax onto companies.

The move is a way for Hollande to maintain an emblematic campaign pledge to make France’s rich help pull the country out of economic crisis, but it has angered business.

France Telecom, which is 27 percent owned by the state, paid Richard a fixed salary of 900,000 euros and a performance-based portion of 600,000 euros in 2011 and 2012.

Richard served as chief of staff to France’s finance minister under the previous president and has been a multi-millionaire since the leveraged buyout of real estate firm Nexity a decade ago.

France Telecom’s financial officer Gervais Pellissier earned 1.07 million euros in 2012, according to a registration document for France Telecom’s annual shareholder meeting. (Reporting by Leila Abboud; Editing by Tom Pfeiffer)

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