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While Renault has just overhauled its governance, with Jean-Dominique Senard as president, the French group has not really finished with Carlos Ghosn. His former CEO, who had held this position since 2005, will now be eligible for an "exit package" including his remuneration for 2018 and various allowances. All for a total amount that could reach 30 million euros.
Fixed pay rather certain
His annual fixed salary was set at one million euros last year. Under pressure from the government, the boss of Renault had consented to a decrease of 19% compared to the previous year. This part of his remuneration is the one that is the least debatable, estimates an article of Echoes, stating that the date used as a reference should be that of his resignation, which was validated on Thursday, January 24, and not his arrest, November 19 last. If the first days of 2019 are paid to him, it would be necessary to add about 65,000 euros.
Regarding variable compensation for 2018, the calculation will be more complex. On the ceiling set at one million euros, Carlos Ghosn should not be able to reach the 75% expected form of free action. This payment was subject to the presence of the director on the board of directors in 2022, at the end of his term renewed last June. It could still receive the cash portion of this variable portion, or 250,000 euros.
Around 22 million euros in shares
But most of the amount that could perceive Carlos Ghosn is found in so-called "performance shares" (paid under conditions of presence and performance).
"If Carlos Ghosn resigns from these functions on his own initiative in order to badert his rights to retirement, he could therefore be definitively awarded all of the performance shares simply awarded in respect of his long-term remuneration, or about 22 million of euros (at the closing price of January 22, 2019) "summarizes a summary produced by the firm Proxinvest, which advises shareholders, particularly those of Renault.
The board of directors will have to decide
The payment of a deferred variable part is also in the program: in 2014, it received 1.36 million euros of unblockable shares in February 2019. The presence within the company was however required but in view of the context rather special, the payment or not of these remunerations should be decided by the board of directors.
"There will be negotiations, the fact that it is far and in a bad position should lead to the unions already screaming scandal be heard by the state and the new direction," says Bernard Jullien, lecturer in economics at the University of Bordeaux, Europe 1.
Non-competition clause and retirement hat
Renault's reference document also provides for a non-compete indemnity, which compensates for its commitment not to compete with the automotive group at the end of its mandate. He could thus claim two years of gross, fixed and total remuneration, an amount paid in the form of 24 monthly installments. However, it is up to the board of directors to decide on "the application or not of the non-competition clause and may waive the application of this clause unilaterally."
Finally, Carlos Ghosn will be able to benefit from an additional pension plan (or retirement hat) for an amount estimated at 800,000 euros per year. The deposed leader will turn 65 on the 9th of March and can theoretically claim his rights.
The time for revenge for shareholders?
All the elements of remuneration, except for the fixed part and the retirement, will be put to the vote of the shareholders at the general badembly of next June.
And a scent of revenge could emerge on this occasion. In 2016, the shareholders had voted against the compensation of the CEO for the year 2015. A vote is advisory but that was at the time a serious setback for Carlos Ghosn, who had in the wake well approved his emoluments by the board of directors.
Except that since then, the Sapin 2 law has made this vote binding. Shareholders could therefore oppose the payment of a large part of the compensation. The state in the first place. Last year, the majority shareholder voted against his remuneration for 2017, but it was narrowly adopted, with 56.5% of the votes.
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