Paris (AFP)

The new boss of Renault Luca de Meo will be paid better than his predecessors Thierry Bolloré and Carlos Ghosn, with 1.3 million euros of annual fixed and a total remuneration which can exceed 6 million euros according to his performances, according to a document put online by the French manufacturer.

If we exclude the remuneration received by Mr. Ghosn as an officer of Nissan and which enabled him to reach a total of 15 million euros per year, the latter would have been entitled to Renault at a maximum of 4.7 million after agreeing in 2018 to reduce his salary by 30% under pressure from the French government, according to an AFP calculation.

A source close to the matter stresses, however, that Luca de Meo, former boss of Seat (Volkswagen group) would have "agreed to lower his more variable fixed compensation" to come to Renault.

The Italian executive, who will take up his post of managing director of Renault on July 1, will be entitled to a fixed amount of 1.3 million euros per year payable "in twelve monthly installments", according to the principles of remuneration posted online by the French automaker on its website.

To this may be added an annual variable remuneration which may reach a maximum of 150% of the fixed amount "according to quantitative and qualitative criteria", ie 1.95 million euros.

In addition, he may receive variable long-term compensation each year of up to 75,000 Renault shares. Their "final acquisition will be subject to the achievement of performance criteria evaluated over a cumulative period of three years and a condition of presence of three years from their date of allocation".

This package is valued at almost 2.6 million euros at the current price of the security, i.e. a theoretical maximum total (fixed, more variable annually, more variable long term) of nearly 6 million euros per year if the Renault action remained unchanged.

But the title has dropped by almost half since the arrest of former boss Carlos Ghosn in November 2018, as a result of the crisis that shook the alliance with Japanese partner Nissan. If the manufacturer turns around, its value could take off again and Luca de Meo would receive much more.

- Controversies -

By way of comparison, his predecessor Thierry Bolloré, appointed at the start of 2019 and sacked in October, had been allocated 900,000 euros in fixed compensation, plus a variable portion of up to 125% of this amount, as well as 50,000 performance shares. At the current Renault share price, his maximum compensation would therefore reach around 3.7 million euros.

The remuneration of Carlos Ghosn, now a refugee in Lebanon after fleeing Japan where he is being prosecuted for various alleged embezzlement, had been the subject of controversy in the past.

Forced by the French government to accept a 30% reduction in his compensation when he renewed his mandate in 2018, Mr. Ghosn was entitled to 1 million euros in fixed salary, a variable salary capped at 1 million euros, as well as 80,000 performance shares, a theoretical maximum of 4.7 million euros.

In previous years, however, he earned significantly more. His fixed price reached 1.23 million euros, to which was added a variable variable part of 180% of this amount and 100,000 performance shares, for a current share price of a total of nearly 7 million euros. .

Questioned by AFP, the consulting firm to the shareholders Proxinvest underlines that the remuneration of Carlos Tavares, boss of PSA (Peugeot, Citroën, DS, Opel, Vauxhall) reached 7.6 million euros in 2018 and that the average effective compensation for managers of CAC 40 companies is around 5.8 million.

However, the new boss of Renault is far from certain of achieving the objectives allowing him to claim all of the expected variable compensation. "Everything will be played out in the requirements of the performance conditions, the shareholders will have to make sure that they are really demanding, which had not been the case for Carlos Ghosn", believes Charles Pinel, partner of Proxinvest .

Carlos Ghosn's compensation also took into account his functions as chairman of the Renault board of directors, while Luca de Meo only occupies the executive management.

The current president Jean-Dominique Senard has accepted the position for 450,000 euros annually.

© 2020 AFP