PARIS, May 29 (Reuters) - Shareholders of advertising agency Publicis approved the pay packages of its chief executive and chairman on Wednesday, the first example in France of the “say on pay” governance common in the U.S. and Britain.
At an annual meeting on Wednesday, 79 percent of shareholders voted for CEO Maurice Levy’s 2012 compensation of 4.8 million euros, which was based only on performance without a fixed salary.
In the United Kingdom, where pay packages are regularly voted on by shareholders but almost never rejected, that would represent an embarrassment for management.
In comparison, Chairwoman Elisabeth Badinter, who is the group’s biggest shareholder with a 9.5 percent stake, saw her package backed by 99 percent of shareholders.
Levy’s pay, which is among the highest of French bosses, became a flashpoint during the 2012 Presidential election in which eventual winner Francois Hollande slammed what he called excessive executive pay and called on the rich to pay more tax while the country was in economic crisis.
Levy earned 16 million euros in 2012 as part of a deferred performance scheme in which he met the targets.
Since his election, President Hollande has made taxing the rich part of his political programme, although his administration has run into problems on the specific measures to do so.
A first proposal for a 75 percent tax on salaries above one million was rejected by France’s highest administrative court as unconstitutional and is in the process of being rewritten.
The French government also said last week that it was dropping a plan to pass a law to impose a ceiling on executive pay and require “say on pay” votes in the private sector.
The country’s business lobby, Afep-Medef is inching towards encouraging more transparency on pay issues. Les Echos reported on Monday it was working on new guidance to recommend wider adoption of “say for pay” measures.
At Publicis, shareholder advisory firm ISS remained critical in its report that the votes on pay hadn’t been applied to more executives.
Shareholder votes on pay in Britain will only become binding later this year but a series of protest votes on the issue at major companies last year forced the resignation of at least one chief executive.
Publicis shares were down 2.4 percent to 56 euros per share at 1152 GMT while the French blue-chip index was down 1.4 percent.