Poor Pierre-Henri Gourgeon

Old May 30, 2012, 2:38 am
  #1  
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Unhappy Poor Pierre-Henri Gourgeon

First no more free Business Class tickets to Ile Maurice, now this!

From Le Monde:

Bercy refuse de valider la prime de 400 000 euros de l'ex-PDG d'Air France

Edited to add link to a similar article in English (Reuters):

http://www.reuters.com/article/2012/...84S1FU20120530
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Old May 30, 2012, 2:40 am
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But I suppose he still has CDG Express as a consolation.
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Old May 30, 2012, 3:10 am
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What is funny is that the French government makes all this noise about the 400,000 bonus of PHG but is in no position to refuse it as AFKL is not a State company but a listed firm. Assuming that it is again discussed at the Board level and requires a fresh approval by the Board, the French government could ask its representative to vote against it. But the press release says that they will only be asked to abstain. Why can't they vote no if that is the desire of the State shareholder. This is just a parody of saber rattling.
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Old May 30, 2012, 3:15 am
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Very true, brunos.
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Old May 30, 2012, 4:10 am
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Originally Posted by brunos
But the press release says that they will only be asked to abstain. Why can't they vote no if that is the desire of the State shareholder.
Because only votes in favour are counted and need to meet the majority of shares. Abstentions are assimilated to vote against.
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Old May 30, 2012, 4:27 am
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Frankly, that is not my point. All of this is just symbolic, but symbols are important. If the State wants to send a strong message to the board, especially to the executive directors, their representative should vote against, not abstain.
By the way, who is granting this bonus. Is it AF or AFKL?
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Old May 30, 2012, 4:36 am
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Originally Posted by brunos
Frankly, that is not my point. All of this is just symbolic, but symbols are important. If the State wants to send a strong message to the board, especially to the executive directors, their representative should vote against, not abstain.
But they can't. There is no "no" vote. I wasn't clear when I said that only yes vote are counted, sorry: they're just asking "who is in favour of proposition number XYZ" ? and they look if the number of voting shares is > 50% of shares. Basically, you're handed a card where all the proposal numbers are mentionned, and you check the ones you approve. There is no "no" option to check, they just count the voting bulletin as "yes". You either check or don't do anything (and abstain).

I don't know who's paying but I assume it's the entity that paid his salary as it's part of his work severance package. I agree with you it's all symbolic anyway since it's probable they won't get the money back.

Last edited by Richelieu; May 30, 2012 at 5:30 am
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Old May 30, 2012, 7:11 am
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Originally Posted by brunos
By the way, who is granting this bonus. Is it AF or AFKL?
I would say AFKL, as he was CEO of both AFKL & AF and as we are talking about the board meeting and AGM of AFKL. Apparently, the decision on the non-compete clause was approved by the AFKL board in October 2011.

With respect to abstaining or voting against, it looks more like a competition based on words between Moscovici & Montebourg ...

Le ministre de l'Economie refusera de valider la prime de non-concurrence de 400.000 euros verse l'ancien directeur gnral d'Air France-KLM, Pierre-Henri Gourgeon, lors de l'assemble gnrale de la compagnie jeudi, a annonc Bercy mardi soir dans un communiqu.

Ces indemnits, valides par le prcdent gouvernement, ne s'inscrivent pas dans le sens des rgles de modration salariale et de dcence annonces par le prsident Franois Hollande, justifient le ministre de l'Economie Pierre Moscovici et son homologue charg du Redressement productif, Arnaud Montebourg.

Le reprsentant de l'Etat aura pour instruction de s'abstenir de valider l'indemnit de 400.000 euros verse au prcdent directeur gnral d'Air France-KLM, lors de l'assemble gnrale de la socit, le 31 mai 2012 au moment o l'entreprise connat une situation difficile, indiquent-ils.

L'Etat attend un comportement exemplaire en matire de rmunrations des dirigeants. Le gouvernement dfinira trs prochainement de nouvelles rgles sur la rmunration des dirigeants d'entreprise, conformment aux engagements du Prsident de la Rpublique, ajoutent les deux ministres.
Originally Posted by LCI
"Nous voterons contre la prime qui a t accorde l'ancien dirigeant d'Air France et qui a mis la socit dans cette grave difficult, cela s'appelle la dcence salariale", a confirm Arnaud Montebourg l'issue du conseil des ministres mercredi, alors que la veille Bercy avait voqu une "abstention" de l'Etat actionnaire. L'assemble gnrale de la compagnie, lors de laquelle aura lieu le vote, est prvue jeudi.
http://lci.tf1.fr/economie/entrepris...n-7323279.html

The first vote should be by the board of directors. It is not about approving the payment; it is a legal obligation the board has: to submit to a vote by the AGM all contracts belonging to a list defined by law, such as a contract between a CEO and the company. Not submitting the contract with the non-compete clause to the AGM would lead to the members of the board of directors being in breach of the Code du Commerce. This vote has probably already taken place, as the list of resolutions must be included in the official notice of the AGM.

The second vote, which is about approving the resolution submitted by the board, is by the AGM. Whether it has any impact is another issue.

Last edited by JOUY31; May 30, 2012 at 12:51 pm
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Old May 30, 2012, 7:30 am
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Hi Richelieu. Now I am getting utterly confused.
I have never seen a Board of Directors/Conseil d'Administration of a private (meaning not State-owned) company operate as you describe. Actually, it would be against French law of Socit Anonyme (and laws in most countries). Directors are individuals and vote as they wish. Each one has one vote whoever he/she "represents" or how he/she was appointed to the board. They do not vote with a proportion of "their" shares.

On the board of AFKL Group, there is one guy appointed by the French State (I think currently J.D. Comolli):
http://www.airfranceklm.com/fr/le-gr...t-dentreprise/
Propositions are formulated by the compensation committee (a group of directors) and discussed by the whole board. But each director has one vote. Of course, decisions are usually reached by consensus.

My question about who proposes/pays this bonus is not unsignificant because Socit Air France is a subsidiary of AFKL with a structure inherited from its time a State-owned company. its board is quite different:
http://corporate.airfrance.com/fr/la...dministration/
But it is hard to get a clear picture of the AFKL legal structure.
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Old May 30, 2012, 7:43 am
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Originally Posted by brunos
Hi Richelieu. Now I am getting utterly confused.
I have never seen a Board of Directors/Conseil d'Administration of a private (meaning not State-owned) company operate as you describe. Actually, it would be against French law of Socit Anonyme (and laws in most countries). Directors are individuals and vote as they wish. Each one has one vote whoever he/she "represents" or how he/she was appointed to the board. They do not vote with a proportion of "their" shares.
The newspaper article was referring to an approval by the shareholders' general assembly, not the board. Hence the confusion, I think, but it may be mine. If it was an instruction given to the state-appointed boardmember, then I'd agree that a "no" vote and a "absention" vote would be different (both as a symbol and in effect, since they'd vote with just the need of having more "yes" than "no" among voters].
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Old May 30, 2012, 7:45 am
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Originally Posted by brunos
Hi Richelieu. Directors are individuals and vote as they wish. Each one has one vote whoever he/she "represents" or how he/she was appointed to the board. They do not vote with a proportion of "their" shares.
I think you've misinterpreted or misrepresented what Richelieu is saying.

No one votes "with a proportion of their shares" - if by this you mean someone saying "well, 82% of the shares I represent want to say YES, and 18% of the shares I represent want to say NO".

But the size of the shareholding has to be factored in. If the French government, who apparently own 15.9% of the company, were to abstain, rather than being interpreted as "1 vote - an abstention", it has instead to be weighted as a vote representing fully 15.9% of the issued shares.

So anyone who owns 50.1% or more of a company can always get their way - their single vote will always outrank the (potentially thousands of) other smaller shareholders' votes, who at most only carry a combined weight of 49.9%.
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Old May 30, 2012, 8:29 am
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Originally Posted by brunos
If the State wants to send a strong message to the board, especially to the executive directors, their representative should vote against, not abstain.
The article states "s'abstenir de valider" rather than "s'abstenir" tout court, viz. "refrain from approving" rather than "abstain."
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Old May 30, 2012, 9:35 am
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Well, it seems that, even in the case of a negative vote by the AF/KL AGM, the non-compete clause for PHG cannot be invalidated. It looks as if this is more about posturing by various parties (trade unions, politicians, ...) than about having a real impact.
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Old May 30, 2012, 9:42 am
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Maybe they'll give him 5,000 FB miles and a 50 TDC by way of compensation.
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Old May 30, 2012, 11:01 am
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I don't understand how a company that was so badly managed over the last few years can agree on giving money against a NCC for the exiting CEO
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