PARIS — French President Nicolas Sarkozy has declared war on corporate barons who fire thousands of employees, drive firms into the ground and walk away from the ruins with multimillion-dollar bonuses. He has plenty of company in Europe.
In response to the global economic crisis, Sarkozy has called Western European leaders together for a summit meeting here today aimed at overhauling the financial system. In France, a spokesman says legislation to ban golden parachutes will go to Parliament within weeks, fulfilling a campaign promise Sarkozy made last year.
European leaders did not wait until the current global crisis to confront the problem of runaway executive compensation. The image of American chief executives pocketing giant bonuses regardless of the damage they inflict on their companies and the economy only reaffirms disdain for what the French call "Anglo-Saxon neoliberal capitalism." They pronounce the phrase with a scorn comparable to John Steinbeck's description in "The Grapes of Wrath" of business as "curious ritualized thievery."
Sarkozy has a reputation as atypically pro-American among the French because of his emphasis on free markets and hard work.
But in recent years, he and fellow Europeans across the ideological spectrum have expressed hostility to the surging incomes of corporate bosses. The Dutch finance minister has proposed a "fat cat" tax increase of 30% on bonus and severance pay. The prime minister of Luxembourg, Jean-Claude Juncker, has condemned excessive pay as a "social scourge."
"There has been too much abuse, too many scandals," Sarkozy said last week during a nationally televised speech. "So either professionals agree on acceptable practices, or we will fix the problem with a law before the end of the year. . . . Executives should not receive free shares. Their compensation should be indexed to the real economic performance of their company. These executives should not aspire to a golden parachute if they have made mistakes or put their enterprise in difficulty."
Even France's confederation of business enterprises got on the bandwagon. Its president, Laurence Parisot, said the group's ethics committee would "recommend the suppression of golden parachutes" to restore responsibility to the corporate boardroom.
For better or for worse, rejection of the U.S. economic model remains entrenched in France and other countries with a more state-driven, social-democrat approach.
