French President Nicolas Sarkozy criticized Societe Generale on Friday for awarding stock options to top executives after the bank took state aid to help it weather the financial crisis.
Societe Generale said management would not exercise any options while the group was benefiting from government support as it sought to calm the mood after other leading politicians branded the move “indecent” and “bizarre.”
“Clearly some people are having trouble understanding what we said,” French President Nicolas Sarkozy told a press conference in Brussels. “I repeat that when there is ... state aid, bonuses, stock option plans and exceptional payments are unacceptable.”
He added that such moves would be a “scandal.”
Corporate pay has been at the center of rows on both sides of the Atlantic in recent days as politicians criticize rewards for bosses of companies bailed out with government money.
French banks received 10.5 billion euros (US$14.3 billion) in aid last year, with SocGen taking a 1.7 billion euro slice, to help them weather the global credit squeeze and keep lending. A similar amount is being made available this year.
SocGen was itself among European banks that received payments from American International Group after the US insurer was bailed out. The French group on Monday defended the US$11.9 billion sum, saying it had acted within its rights based on previous agreements.
Royal Bank of Scotland, now majority-owned by the British government after a £20 billion (US$29 billion) bailout last year, is mired in a row over a £16.6 million pension pot for ousted chief executive Fred Goodwin.
Separately, Sarkozy ruled out new social spending on Friday after anger at the economic crisis drew a million striking workers onto the streets, as the opposition clamored for a boost to low wages.
Factory and white collar workers from across the private sector joined a million civil servants on Thursday in France’s second nationwide strike in two months to demand protection from the economic crisis.
Unions and the left-wing opposition, backed by up to four-fifths of the public, are demanding measures to lift wages, boost consumer spending and scrap an unpopular tax break for the highest earners.
“Yesterday’s protests showed how worried workers are about the economic crisis,” Sarkozy told a press conference in Brussels.
But the French leader ruled out new social spending to cushion the blow of the crisis, saying a package of benefits and tax cuts worth 2.6 billion euros approved last month had yet to be rolled out.
The social measures were approved after a nationwide strike in January, in addition to a 26 billion euro industrial stimulus plan.
But Jean-Claude Mailly, head of the FO union, told RTL radio that labor leaders were “determined to keep up the pressure,” and were considering calling new protests on Labour Day on May 1.
“We need to keep up the pressure,” said Socialist Segolene Royal.
“This government is cut off from the people,” she told France Info radio. “The anger we saw on the streets can only grow, faced with a government and president who remain deaf and blind to the country’s demands.”
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RESHAPING COMMERCE: Major industrialized economies accepted 15 percent duties on their products, while charges on items from Mexico, Canada and China are even bigger US President Donald Trump has unveiled a slew of new tariffs that boosted the average US rate on goods from across the world, forging ahead with his turbulent effort to reshape international commerce. The baseline rates for many trading partners remain unchanged at 10 percent from the duties Trump imposed in April, easing the worst fears of investors after the president had previously said they could double. Yet his move to raise tariffs on some Canadian goods to 35 percent threatens to inject fresh tensions into an already strained relationship, while nations such as Switzerland and New Zealand also saw increased
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