The boss of French automaker Renault has seen his salary slashed in the wake of a shareholders revolt.
Renault officials said on Wednesday that CEO Carlos Ghosn’s pay package would be reduced.
At a meeting in April, shareholders refused to endorse Ghosn’s anticipated €7.25 million for 2015. The company’s board of directors, however, ignored the decision and went ahead with his salary, saying it was “consistent” with his peers in the industry.
They also cited the strong performance of Renault for the year.
But the French government, owner of a fifth of Renault’s shares, raised the stakes by threatening to introduce new legislation unless the board reconsider the package. The minister of economy did not elaborate on such legislation.
On Wednesday it was announced that the flexible part of the package will be reduced by 20% and this would be capped at 180% of fixed salary.
Ghosn has since said that he will donate €1 million each year from his remuneration to the company’s foundation.
In 2013 France introduced “say on pay” laws. Renault shareholders’ rejection was the first since the regulations took force.
The issue is sensitive, especially at a time when the economy is faltering. Senior executives have criticised heavily for their generous wage increases while growing unemployment has brought the rate to its highest since the end of 1997.
Last October, angry employees ripped off the shirt of Air France's human resources chief after chasing him out of a meeting about restructuring proposals at the airline.
