Sponsor Message:
Civil Aviation Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
French Politics?  
User currently offlinemffoda From United States of America, joined Apr 2010, 1083 posts, RR: 0
Posted (2 years 4 months 3 weeks 1 day 2 hours ago) and read 3616 times:

Maybe our French friends can provide some balance to this ongoing saga with AF and the French government, regarding this attack on Pierre-Henri Gourgeon, former CEO of Air France-KLM.

What is going on?

Quote:

"French government set to veto executive payoff at Air France-KLM

France’s new finance minister Pierre Moscovici, is expected to vote against a €400,000 ($497,608) compensation package awarded to Pierre-Henri Gourgeon, former CEO of Air France-KLM."


http://atwonline.com/airline-finance...ecutive-payoff-air-france-klm-0531


It seems like a whole lot of BS!


harder than woodpecker lips...
15 replies: All unread, jump to last
 
User currently offlinePHX787 From Japan, joined Mar 2012, 7752 posts, RR: 18
Reply 1, posted (2 years 4 months 3 weeks 1 day 1 hour ago) and read 3585 times:

(I think this thread needs a title change) But it does seem a little extreme. Was AF in the deep end with the Sarkozy government, or just the socialists?


我思うゆえに我あり。(Jap. 'I think, therefore I am.')
User currently offlinemffoda From United States of America, joined Apr 2010, 1083 posts, RR: 0
Reply 2, posted (2 years 4 months 3 weeks 1 day 1 hour ago) and read 3547 times:

Quoting PHX787 (Reply 1):

(I think this thread needs a title change)

It may? But, I'll still trying to figure out why a New finance minister has any "vote at all" on a previously agreed on contract between AF/ their officers and their shareholders! Something seems seriously out of whack??   



harder than woodpecker lips...
User currently offlinecmf From , joined Dec 1969, posts, RR:
Reply 3, posted (2 years 4 months 3 weeks 1 day ago) and read 3470 times:

Quoting mffoda (Reply 2):
But, I'll still trying to figure out why a New finance minister has any "vote at all" on a previously agreed on contract between AF/ their officers and their shareholders! Something seems seriously out of whack??

How about because the annual meeting required to approve it hasn't taken place and the government is a shareholder.


User currently offlineLOWS From Austria, joined Oct 2011, 1166 posts, RR: 1
Reply 4, posted (2 years 4 months 3 weeks 23 hours ago) and read 3388 times:

Quoting PHX787 (Reply 1):
But it does seem a little extreme.

How about not paying large bonuses to CEOs and fomer CEOs of loss making companies?

Quoting cmf (Reply 3):
government is a shareholder

  


User currently offlineMillwallSean From Singapore, joined Apr 2008, 1269 posts, RR: 6
Reply 5, posted (2 years 4 months 3 weeks 23 hours ago) and read 3388 times:

What is it that's not clear?

One of Hollandes election promises was to curb executive remuneration. He started with slashing his own by the way. Its a policy most french would support even if they didn't vote for Hollande.

The finance minister believes that the agreed compensation package for Monsieur Gourgeon is to lavish. He does not have the powers to renegotiate it. However at the annual general meeting of AirFrance/KLM the French government will vote no to the package. They will vote as Air France shareholders.
The package as such needs to be approved by Air France/KLM shareholders at the annual general meeting to come into effect.

If its not approved at the annual general meeting it will have to be renegotiated. This time with a french government less keen on executive remuneration. That will probably take so long time so that the new legislation that will be introduced to curb executive remuneration will be in place and it will ensure that Monsieur Gourgeon gets a much, much smaller farewell package.

Question is now what does the other shareholders of AirFrance/KLM think of this?
After all the french government isn't majority owner but they sure have clout over many other shareholders. Will be interesting to see if they chose to use it on such a small issue as the remuneration for Monsieur Gourgeon.



No One Likes Us - We Dont Care.
User currently offlineicna05e From France, joined Feb 2006, 298 posts, RR: 0
Reply 6, posted (2 years 4 months 3 weeks 16 hours ago) and read 3050 times:

Quoting MillwallSean (Reply 5):
What is it that's not clear?

Well, as a Frenchman (although not really into politics/corporate law), it does appear a little bit hazy to me. As far as I can tell,
- 400k€ were paid last November to M. Gourgeon, as a going-away present, compensation for a non-competitive clause. By the way, that's just a fraction of his 1.5M€ "golden parachute"
- Presidential elections happen in May; Ministers slash their benefits, and try to get corporate managers to do so as well.
- the Nov 2011, 400k€ bonus is presented to the Board only now, May 31st and the shareholders have to vote for or against. I'd assume the pattern to be: vote it, THEN pay it, but I must be lacking some common sense. Anyway, 80%, including the French Govt and their 15-something % vote against the bonus.
- M. Gourgeon retreats under a rock somewhere but let his friends tells the press that he has no intention of returning the money.

I'm still missing a piece...
Anyway, this Gourgeongate has at least the advantage to cast some more light on those habits. And M. Spinetta, current CEO of AirFrance, as well as M. Gallois, CEO of EADS on his way out, have promised not to ask for such "compensations".


User currently offlinePanHAM From Germany, joined May 2005, 9524 posts, RR: 31
Reply 7, posted (2 years 4 months 3 weeks 16 hours ago) and read 2977 times:

This is pure and senseless populism in the new People's Republic of France. Why should Gourgeone pay the 400K for not hiring with the competition back? The only reason would be that EK or EY offered him a high paying job, which would be quite funny, imagine the situation - "here are the 400 K - minus the taxes paid on that amount, merci beaucoup, , I start with a Gulf carrier next week".

Now, future contracts of course can be without a competetive clause but in that case people are free to hire with the competition, which in some cases can be more damaging. Capping the pay for top executives to the 20 fold of the lowest paid government employee , which reportedly is around € 18100 pa. will mean at thze end of the day, that the capable people will either stay at home or leave the country for greener pastures.

Why do an 80 hour plus week from which you can be fired any time when the performance does not show for peanuts? There's a reason for the golden parachutes, only a few get a similar job. Only those who are offered a good paying government job as security would do that. So, the old wisdom strikes again, when paying peanuts, you get monkeys.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlinemffoda From United States of America, joined Apr 2010, 1083 posts, RR: 0
Reply 8, posted (2 years 4 months 3 weeks 3 hours ago) and read 2566 times:

Quoting icna05e (Reply 6):
Quoting MillwallSean (Reply 5):
What is it that's not clear?

Well, as a Frenchman (although not really into politics/corporate law), it does appear a little bit hazy to me. As far as I can tell,
Quoting PanHAM (Reply 7):
This is pure and senseless populism in the new People's Republic of France. Why should Gourgeone pay the 400K for not hiring with the competition back?

On the other hand, his firing might not be just performance based? On the website leeham news website... There is a quote, form the comments section that states otherwise... He provides no workable link to the story... He suggests that he was let go because of his decision to buy 787's over the A350.

Quote:

“Meanwhile, a French lawmaker described as “indecent” a EUR400,000 golden handshake for Pierre-Henri Gourgeon, the former Air France-KLM chief executive who was fired last year, at a time when the airline’s personnel is threatened with job cuts. He called on Gourgeon to relinquish his claim to the departure bonus.

Bernard Carayon, a deputy of the conservative UMP party, said Gourgeon was fired because he was pushing for Air France to buy aircraft made by Boeing Co (BA) instead of planes assembled in France by Boeing rival Airbus, a unit of European Aeronautic Defense & Space Co NV (EAD.FR). Carayon said he had been able to thwart that attempt by organizing a cross-party lobby of 186 French deputies.”


I found a link that states the same thing, link follows.

http://www.nasdaq.com/article/french...r-france---ministry-20120525-00052

What is Bernard Carayon's background? And can he fire a private sector CEO?



harder than woodpecker lips...
User currently offlinePanHAM From Germany, joined May 2005, 9524 posts, RR: 31
Reply 9, posted (2 years 4 months 2 weeks 6 days 21 hours ago) and read 2358 times:

Well, obviously it is populism on all sides of the political spectrum. A company, even when the state owns shares, should be left alone and run as a commercial enterprise making its decisions solely on commercial reasons and never on political reasons.

AF should be able to buy the aircraft that suits them best for their route network. That was the case with the 777. If a political body influences such decisions and the company is making losses as a result, EU rules say that these losses cannot be cpompensated by the state as it would be a forbidden subsidy. Now, politics would find a "poliical solution" to avoid such penalties and at theend of the day this lads to competetive dis-advantages of companies based in countries where the state does not interfere.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlinesweair From Sweden, joined Nov 2011, 1827 posts, RR: 0
Reply 10, posted (2 years 4 months 2 weeks 6 days 19 hours ago) and read 2291 times:

25 787s and 25 A350s, I cant really see that AF has done anything wrong, rather the opposite, a very balanced order, is 25 less A350 the end of the world for some politicians?

Nationalism is a very bad idea in business, its better to buy what is needed and try to make money, than being politically correct. The 787 was cheap and maybe its size was a better fit for AF/KLM? The smallest A350 is quite a large aircraft.


User currently offlineicna05e From France, joined Feb 2006, 298 posts, RR: 0
Reply 11, posted (2 years 4 months 2 weeks 5 days 22 hours ago) and read 1852 times:

Quoting PanHAM (Reply 7):
populism in the new People's Republic of France. Why should Gourgeone pay the 400K for not hiring with the competition back?

The sum is arguable, but what I really don't get is the way things went. Can a company write a check to its soon-to-be former CEO without getting it's shareholders approval FIRST? Then why even bother having a vote, 6 months later? Is that normal practice?
In my opinion, that bonus is not deserved. Some AF employees said he should be allowed to work for the competition, and that would only help AF's situation  

As for AF's fleet, I am sad to realise we might have taken a step back as a country. AF has shown in the past more independance, and this "rally" of Bernard Carayon is a bad joke. 25 A350 is 25 too many if the aircraft doesn't fit AF best. Well, hopefully it will be a start order to try the suit, as they did with the 77E/343, and there will be top-ups for whichever one or both is best.


User currently offlinePanHAM From Germany, joined May 2005, 9524 posts, RR: 31
Reply 12, posted (2 years 4 months 2 weeks 5 days 20 hours ago) and read 1770 times:

I don't know how it is in France, in Germany the hiring and firing of the CEO, CFO, COO etc falls into the competence of the supervisory board.

These contracts usually are for a period of 5 years. If a CEO is fired and still has one or two years on his contract left, the company must pay / compensate. If the company writes in the terminating contract that the person cannot work for another airline for the next xx number of years, they must compensate him for that time as well. Whatever is written into a contract must be fulfilled.

LH had a similar case where a high ranking company officer who was supposed to lead AUA "defected" to EK. LH was not amused about that, but obviously he did not have a competition clause in his contract.



E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineicna05e From France, joined Feb 2006, 298 posts, RR: 0
Reply 13, posted (2 years 4 months 2 weeks 5 days 5 hours ago) and read 1418 times:

It all makes sence explained that way... as with any worker, if someone's contract is terminated before its term, penalties should be paid to them.
If you want someone to not work for the competition, you should pay a compensation for that.
Agreed.

But all that has to be written somewhere, no? If it was in his contract, I don't get what any shareholder has to say in the matter. If it wasn't, too bad for him.

So what I get is, the shareholders must have voted against paying the non-competition compensation (6 months after it being paid). Which means he his set free to work for whoever. BUT, he claims he has in the meantime already turned down two job offers by competitive companies, so the clause has already been "activated"...

It still isn't clear. They should have decided whether or not to "enforce" the clause when they showed him the door. How long do they have for that? And, REALLY, you expected him to bring back the money after 6 months? Come on!


User currently offlinePanHAM From Germany, joined May 2005, 9524 posts, RR: 31
Reply 14, posted (2 years 4 months 2 weeks 4 days 22 hours ago) and read 1240 times:

Voting down a contract clause retroactively is difficult, the shareholders can do that only at the annual general meeting. I doubt that such an action would be legal. Pactum sund servandum, contracts must be fulfilled. Gourgeon has not done anything wrong and a populistic political decision is no legal cause.


E's passed on! That parrot is no more! He has ceased to be! E's expired and gone to meet 'is maker!
User currently offlineworkhorse From France, joined Jul 2005, 219 posts, RR: 0
Reply 15, posted (2 years 4 months 2 weeks 4 days 19 hours ago) and read 1132 times:

Quoting mffoda (Reply 8):
What is Bernard Carayon's background? And can he fire a private sector CEO?

He can't. It's all taurus feces. Gourgeon was fired because he did a bad job as a CEO, period. And, by the way, instead of paying him 400K€ to NOT to work for competition, if I were AF, I'd rather pay money for him to go to work for EK or QR or FR. With his talent, he'd probably be able to run these companies down in a few years.  


[Edited 2012-06-04 01:40:48]

Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Interview Of Heathrow CEO (in French) posted Tue Mar 13 2012 12:31:14 by aircellist
What Do The French Call The 747 And 777? posted Mon Nov 7 2011 13:03:37 by 76er
French Court: CO responsible for AF Concorde crash posted Mon Dec 6 2010 02:28:20 by alasdair1982
French Aviation Thread: What A Busy Week posted Fri Nov 26 2010 09:07:40 by Pihero
French Strikes, The Aviation Effects posted Mon Oct 18 2010 11:41:25 by Bennett123
AF447: French Court Finds "Criminal Error" posted Thu Sep 30 2010 07:34:49 by longhaul67
French Football Team Return Charter posted Fri Jun 25 2010 02:30:30 by tom355uk
French ATC Strike - How Long? posted Tue Feb 23 2010 12:38:42 by TeamDA
French Airport Strike? posted Sat Jan 9 2010 00:16:38 by Treg
Pre LCC Era:French Regl Airports And Intl Flights? posted Fri Nov 13 2009 06:12:31 by Vfw614