France bans bonuses for bailed-out bosses

THE French government today became the first in the world to ban or limit bosses of bailed-out companies from receiving bonuses.

French prime minister François Fillon was today presenting an executive pay decree primarily concerned with French banks, which have received more than £10billion in government aid this year.

The law, which is expected to be passed easily, will also apply to firms which have not received bail-outs but are sacking staff or cutting workers' hours.

The awarding of shares will be banned until the end of next year, and bonuses severely capped.

The law is also set to put a cap on pension pay-outs, to prevent a repeat of the kind of massive pension pot given to former Royal Bank of Scotland chief executive Sir Fred Goodwin.

Last month French finance minister Christine Lagarde said she wanted a "code of ethics" to cap bonuses. But such an agreement was deemed a farce when the Société Gé*érale bank, which recently received £1.6billion in state aid, tried to award its top four executives stock options worth millions. Although the executives rejected the bonuses, the French government now feels legislation is its only option.

Three million people took to the streets across France this month demanding help for struggling workers and calling on the government to curb executive rewards. A spokesman for the French prime minister's office said the new legislation was "a priority".