France’s finance minister warned against hurried rules to curb excessive executive pay as President Nicolas Sarkozy told business leaders to change their behavior or face legislation.
“We should not rush into ill-informed, speedy and not necessarily efficient legislation,” Christine Lagarde, French finance minister, told the Financial Times.
Sarkozy has told business that if they do no agree to new guidelines to limit bonuses and options at underperforming companies by the end of the month, he will legislate.
Laurence Parisot, head of the employers’ federation Medef, argued there is no need for new curbs as the governance code agreed last October.
“It is not acceptable that executives who have failed or whose companies are in trouble leave a company with a payoff,” she said.
Her arguments have influenced some members of the government. “There are rules already that need to be enforced,” Lagarde said, referring to the code but also the government’s legislation on pay last year. “If anyone does not respect those rules we need to be strong and firm.”