Publication of the 18th edition of Proxinvest’s Report “A Review of CEO Compensation in the SBF 120 index”

Publication of the 18th edition of Proxinvest’s Report

“A Review of CEO Compensation in the SBF 120 index”


Paris, 9 November 2016

  • A record year for compensation in France

Our report on CEO compensation in 2015 revealed record compensation levels. Average total CEO compensation amounted to €3.5 million, up 20% from 2014.

In the CAC 40 the average CEO took home just under €5 million, up of 18% from the previous year. This amount exceeds our maximum socially acceptable pay of 240 times the SMIC (the French national minimum wage), or €4.8 million. Particularly, 26 CEOs in the SBF 120 surpassed this limit, up from 16 in 2014.

We define total compensation as a measure that includes salary, annual bonus, attendance fees, payments-in-kind, stock options, restricted performance shares, other cash incentives, and other forms of indirect compensation.

Our results are a testament to the generosity of Boards when it came to awarding their CEOs in 2015. Salaries, bonuses, and restricted shares (before the application of the Loi Macron) gained 4%, 23% and 33% respectively across the SBF 120. Interestingly, two-thirds of compensation awards were in the form of short-term compensation, salary, annual bonuses, and other awards.

Concerns regarding the observed across-the-board increase in compensation are exacerbated by lackluster market conditions. Over the year, the CAC 40 registered gains of 8.5% belying the fact that the top-line, operating income, and net earnings reported declines of 7%, 3%, and 11% respectively during the same time frame.

  • The five highest paid CEOs were awarded over €10 million each, a first since 2005.

The CEO of Sanofi, Olivier Brandicourt, heads the list with a total compensation of €16.8 million, largely thanks to a €7.2 million “Golden Hello”.  This recruitment boon included a cash component, restricted performance shares, and options.  

Not far behind was Gilles Gobin, founder and Managing Partner of Rubis. Contributing to his largesse was a €14 million share price-linked dividend (3% of annual increases) to compensate him for his dual role as General Partner (he controls two privately registered companies which serve as General Partners). This windfall comprised the lion’s share of his total compensation of €16.4 million. We have long urged the company to modify its bylaws to avoid such excessive payouts in the future.

The controversial Carlos Ghosn, boss of Renault and Nissan, gave up the throne he held last year to finish third in our survey with a total compensation of €15.6 million.  Not only was his double compensation structure (from both Renault and Nissan) complex, it did not have a demonstrable link to performance. Naturally, the historic rejection of his Say on Pay, a first in France, comes as no surprise.

In a coup-de-grace that was shocking in its blatant disregard for shareholder democracy, Renault’s Board steadfastly reaffirmed Mr. Ghosn’s compensation within hours of the vote. The only concession to shareholders came in July, almost a month after the General Meeting, in the form of a 20% reduction in the 2016 annual bonus that was more symbolic than substantive (a reduction of 2% of total compensation).

Bernard Charlès, CEO of Dassault Systèmes came in fourth place raking in €14.1 million, 31% higher than the previous year. The most significant driver of this increase was a staggering restricted share award of €11.7 million (highest in the SBF 120) owing to a progressive equity compensation policy designed to reward him for his ‘entrepreneurial role’ for service of over thirty years.

Schneider Electric makes our coveted list in fifth place with Jean-Pascal Tricoire, its Chairman and CEO, boasting a total compensation of €10.4 million, up 86% year-on-year. The company’s decision to discontinue Mr. Tricoire’s supplementary defined benefit plan (“Top Hat”) was offset by granting him an exceptional one-off award (in cash and shares) of €4.3 million.

  •  Say on Pay 2016: a controversial year for executive compensation  

France’s experience with voting on executive compensation has been short, but had its fair share of controversies. The 2016 proxy season marked the third anniversary of the non-binding vote on executive compensation. The three largest compensation packages in the CAC 40 drew unprecedented shareholder ire: approval rates of 63%, 46%, and 58% were reported at Sanofi, Renault, and Schneider Electric respectively. Conversely, approval rates were highest at Bouygues, Orange, Legrand, and Klépierre where total compensation remained below €2 million. Shareholders have delivered a clear mandate for moderate compensation levels.

Average approval rates for the Say on Pay increased from 88% to 89%, echoing our approval rate increase from 32.2% to 39.7% from 2015 to 2016. Notably, the 2016 season exhibited a marked increase in transparency (we were satisfied with disclosure levels in 57% of compensation packages in the CAC 40). Nevertheless, we were left wanting with respect to alignment between compensation and underlying performance (we were satisfied with only 37% of compensation packages regarding performance alignment).

The 2016 Proxy Season also marked a historic turning point in France. Aside from the highly publicized rejection of Carlos Ghosn’s controversial compensation, cantankerous shareholders expressed their discontent with the compensation of Patrick Kron (outgoing CEO of Alstom) as well as the executive directors of Solocal (the former Pages Jaunes, member of the CAC All Tradable index). While uplifting for shareholder democracy, the legal impact was null, urging lawmakers to take action. True to form, the National Assembly steadfastly inaugurated inter alia a binding vote on executive compensation policy as a provision in a sweeping set of laws dubbed Loi Sapin 2. We commend lawmakers for their bold actions in defense of shareholder rights.

For any further inquiries:

Secretariat Proxinvest : +33 1 45 51 50 43 –

Alexandra Gyarmati, Analyst –

Loïc Dessaint, CEO –


Proxinvest specializes in corporate governance research, shareholder engagement, and proxy voting advice.

This report will be made available exclusively in French for order as of 16 November 2016. All requests to Librairie LDEL/JUSTICIA.

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