Maurice Levy, boss of Publicis Groupe and head of the French employers’ organisation among many other things in his native country, isn’t used to being treated like this. But French politicians on both sides of the political divide are busy criticising a long-term bonus plan that is set to pay him $21.6m (€16m) imminently.
There’s an election looming in France and both contenders, President Nicolas Sarkozy and Socialist opponent Francois Hollande, have made ‘excessive’ executive pay an issue. Sarkozy has not attacked his old chum in person although spokesman Valerie Pecresse called the payment “disproportionate.” Hollande said: “As we ask our fellow citizens to prepare for difficult times, there are some people who grant themselves high pay. That will change.” Hollande is threatening to increase the top tax rate in France to 75 per cent if he is elected.
The payout is the result of a deferred compensation plan tied to performance goals and length of service that was set up in 2003, according to the company. To collect the money Levy had to remain as CEO through the intervening period and see the shares rise, which he has. A clearly rattled PG points out that Levy’s payout amounts to just 0.4 per cent of the value created since 2003, showing that the office calculator has seen some heavy use since the row broke.
Levy (pictured with IMF boss Christine Lagarde), who is due to step down in 2013, has indeed done a good job for PG shareholders over the past decade or so, nabbing third spot in the global marcoms stakes from Interpublic and spending heavily but seemingly wisely on digital agencies Digitas and Razorfish. He also recently ended the ‘partnership’ with Dentsu that had failed to deliver the hoped-for returns (or the ones Dentsu hoped for anyway).
As such the long-term scheme hardly seems excessive. But top executives in every industry are being caught in the row that started with bankers’ bonuses.