$4 Million Severance Elicits Outrage in France; In Response to Public Outcry, Government Vows to Reverse Payout to Head of Auto Parts Company
A wave of indignation swept over France when it became known Tuesday that the head of a large auto parts company who was edged out because of poor results walked away with a severance package worth more than $4 million.</br></br>The outrage, which intensified government threats to pass a law limiting executive pay, reflected a growing sense of unease as the global financial crisis bites ever more deeply into the French economy, with unemployment surpassing 2 million and recrimination mounting against President Nicolas Sarkozy's attempt to remedy the situation by propping up ailing banks and businesses.</br></br>As it has in the United States, the issue of stratospheric compensation packages for executives who were in charge when the crisis erupted has become a rallying cry for fired workers, labor unions and politicians. Many French people, like their U.S. counterparts, have complained they are being made to pay for the greed and heedlessness shown by political and business leaders who allowed world financial markets to spin out of control.</br></br>Aware of the mounting resentment and its political implications, the government was quick to react when news spread that Thierry Morin, who left the Valeo company Monday, received a $4.1 million goodbye gift from the board of directors. The package was granted, the newspaper Liberation reported, even though the company lost more than $250 million last year, laid off about 1,600 employees in France and received nearly $25 million in government aid to weather the crisis.</br></br>The budget minister, Eric Woerth, said it was "provocative" and "abnormal" for a struggling company that received aid from the government -- and in which the government has a minority interest -- to pay out such a generous severance package to someone who was let go over what were described as "strategic differences" with the board of directors.