PARIS -- The Renault board's decision to defy shareholder rejection of CEO Carlos Ghosn's 7.2 million euro ($8.15 million) payout for 2015 has caused the French government to take action.
France may make shareholder votes on executive pay binding if a guideline to follow their recommendations is ignored by company boards, President Francois Hollande said on Tuesday.
A council on corporate governance, comprising executives from big firms and representatives of the Medef employers association, is reviewing a decision last month by Renault's board to ignore shareholders' rejection Ghosn's 2015 payout.
"I've been told there is a code of good conduct. If it's not applied there will be consequences," Hollande said on Europe 1 radio. "If this council does not react firmly, the first decision will be to make general [shareholder] assembly decisions binding."
Ghosn's 2015 package included 1.23 million euros in fixed salary, 1.78 million euros in variable pay and a further 4.18 million in deferred bonuses and stock.
That was in addition to his salary of 8 million euros as CEO of 43.4 percent-owned Japanese affiliate Nissan.
Hollande, a Socialist who has taken flack from left-wing allies for some pro-business policies he has adopted in attempting to boost the economy and cut unemployment, said performance and talent should be rewarded, but only up to a point.
With the benefits of a modest economic recovery yet to trickle down to many of its citizens, shareholders of firms across Europe have begun to bridle against what increasing numbers of them view as excessive payouts for senior executives.
Hollande's Economy Minister Emmanuel Macron said in early May that France would maintain pressure on Renault to rein in Ghosn's pay in future. The French state is the carmaker's biggest shareholder with more than 18 percent of voting rights.
In Tuesday's interview, the president also said there were no plans to cut the tax burden on companies faster than scheduled, although some cuts could be shifted on to corporate income tax and away from payroll tax.
With a presidential election a year away, Hollande said he would go ahead with plans to ease taxes on households in 2017 if the public accounts yielded some wiggle room.