Alcatel-Lucent has bowed to weeks of political pressure and agreed to slash in the half the bonuses to be paid to former Chief Executive Michel Combes, underscoring the pressure on French companies to rein in executive pay, reports The Wall Street Journal.
Alcatel-Lucent said on Friday that its board has decided to grant Mr. Combes a maximum of 7.9 million euros in total cash bonuses - including a long-term compensation bonus and payment for a noncompete clause - following the sale of the company to Nokia Corp which he oversaw. That compares with a previous stock-and-cash package worth roughly 14 million euros, at current prices, over several years.
The payments to Mr. Combes, who left the company on September 1st to take top jobs working for telecom tycoon Patrick Drahi, could be lower depending on the Alcatel-Lucent’s performance in 2015, Alcatel-Lucent said.
The decision to reduce Mr. Combes’s compensation follows a public outcry when details were first disclosed in the French press in late August. Politicians and union figures decried a “golden parachute” for an executive who had sold off a French industrial icon after being on staff for scarcely more than two years.
Alcatel defended the payments, saying Mr. Combes had helped save the company from bankruptcy and found a buyer that would keep a significant presence in France. But after criticism from a pair of business groups, saying that the compensation didn't follow their recommended norms, the company said it had reviewed the compensation “with the full support and at the request of Mr. Combes.”