Carlos Ghosn lives his last hours at the head of Renault. Still imprisoned in Japan, the CEO of Losange should be removed from office at the board of directors is held Thursday at 10am. Unless huge surprise it is a tandem that should replace him: Jean Dominique Sénard, who was soon to leave Michelin, will be chairman of the board and Thierry Bolloré, who was acting at Renault, will take the lead of the manufacturer.
A resignation rather than a revocation. According to Les Echos, quoting a source close to Carlos Ghosn, the Renault CEO is ready to resign from his position on his own. This would prevent the board from having to impose a dry revocation. But that would not solve a thorny question for the directors of Renault: with what indemnities will it leave? It is potentially a very big time bomb because, on paper, Carlos Ghosn could indeed claim a good amount of money.
A fixed salary of one million euros. According to the reference document of the governance of Renault, several elements are to be taken into account. First, there is fixed compensation: one million euros for the 2018 financial year (compared with 1.2 million in 2017). The variable part of his remuneration depends, however, on performance criteria. At most, it can amount to 100% of the fixed salary, or one million euros. A quarter is paid in cash and the rest in free shares. Except that to touch these actions, Carlos Ghosn will have to be present in the company in 2022, which is very unlikely. His share of variable compensation should not exceed 250,000 euros, if the board of directors pays him.
Queries on variable shares. To this must be added the deferred variable parts. In recent years, Carlos Ghosn has accumulated shares that he can only unlock after four years. In total, this represents a jackpot of nearly five million euros. Specifically, in February 2019, he should have touched the shares of 2014, 1.36 million euros. Then that of 2015 in 2020, that of 2016 in 2021, etc.
What will happen to this treasure of war? Here again, the board of directors will have to decide. "There will be negotiations, the fact that it is far and in a bad position should lead to unions that are already screaming scandal be heard by the state and the new management," said Bernard Jullien, Group Director study and permanent research on industry and employees of the automobile (GERPISA), invited from Europe 1 Wednesday.
An expensive non-compete clause. Renault's reference document, however, stipulates that Carlos Ghosn must not receive severance benefits. But he has a non-competition clause of two years, intended to prevent him from going to offer his services and a competitor, with the risk of exposing the secrets of Losange. The amount of this clause can reach two years of gross remuneration but is subject to the vote of the general meeting. As it stands, the chances of the clause being paid to Carlos Ghosn are slim.
Finally, there is the retirement of the former CEO of Renault, who will turn 65 in March. He can assert his right but it is subject to a condition of presence in the company. The definition of the notion of presence being rather vague, it is difficult to say whether it will be able to benefit from the annual 800,000 euros which were normally acquired for it.
Bercy watches over grain. All these elements of remuneration (excluding retirement) will have to be validated by the general meeting of shareholders, which will be held in June. In case of refusal of remuneration 2018 Carlos Ghosn, the fixed salary would be paid but not the variable elements. At the Ministry of Economy, we are well aware of the scandal that the payment of such fees could cause, especially since the state is the majority shareholder of Renault. In fact, Wednesday night again, Bercy was in contact with the manufacturer's management to find acceptable solutions.