France plans legislation to limit executive bonuses

France plans to introduce a law to limit executive bonuses in the form of stock options or shares as businesses are slow to accept a voluntary agreement, the spokesman for the ruling UMP party said yesterday.

The chairman of employer organisation Medef said it was not in the group's power to force members into such an agreement.

But the government, faced with mass protests and strikes over its social and economic policies, is under pressure to act.

"Medef does not want to react ... since there is neither the desire nor the means, we will give them the means and we will draw up a law," Frederic Lefebvre, spokesman for the centre-right UMP, told French television.

He said bosses should not be able to raise their bonuses unless those of the other employees were also increased.

"I think we can define the main points very quickly," he said. From Europe to the United States, executive bonuses at firms that were bailed out by taxpayers have become a lightning rod for anger over the economic crisis.

Last week, three million people took to the streets in France, demanding more help for struggling workers and asking the government to curb executive rewards.

French banks received €10.5 billion (Dh52.55bn) in aid in 2008 to help survive the credit crunch.

Medef has said it cannot impose curbs on employers, but is asking members to act responsibly. Chairman Laurence Parisot said some bosses were already voluntarily cutting their own salaries to help businesses weather the crisis.

Economy Minister Christine Lagarde said on Sunday the government would use the legal route if a voluntary agreement with employers could not be reached.

In another development, Societe Generale's top four managers will give up their rights to stock options in a plan under attack by political leaders, according to a letter the French bank wrote to its staff.

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