Royal Dutch Shell Plc  .com Rotating Header Image Europe’s fattest cats

(Comment by From the oil companies, only Desmarest appears on the list below…. Does this say something about who will have the biggest job soon…?)

A heavy reliance on stock options to compensate executives puts the French at the top of Fortune’s highest-paid list.

By Peter Gumbel, Fortune
July 25 2007: 5:45 AM EDT

(Fortune Magazine) — This year, Fortune’s list of the highest-paid corporate leaders in Europe reads like a Who’s Who of le tout Paris, with French executives taking ten of the 20 top spots, including first and second place. Carlos Ghosn, CEO of French automaker Renault, easily topped the list with $45.5 million (which doesn’t include the millions he gets for also running Japan’s Nissan (Charts), whose principal owner is Renault). That was more than seven times the size of his 2005 package and more than double that of the second-place CEO, Jean-Paul Agon of L’Oréal (Charts), with $19.3 million.

But the dominance of the French – who far outnumber the three Italians, two Britons and two Swiss on the list – could end next year if French President Nicolas Sarkozy, who has called for “restoring morality to economic life,” gets his way. Within days of the election, his government proposed legislation to curb golden parachutes and outsized stock options. The new law would link farewell bonuses to performance targets and potentially restrict the granting of stock options. 

Highest paid: Carlos Ghosn, with $45.5 million

FORTUNE 500: Current Issue

The French loom large on our list in part because French companies rely on stock options as a critical component of executive compensation. Other European companies have moved to link compensation to long-term performance.

Fortune’s list is compiled by Board-Ex, a British research firm, which calculated total direct compensation for 2006 using salaries, bonuses, options and other perks reported by companies on last year’s Fortune Global 500 list. Long-term incentive plans (LTIPs) and other performance-based remuneration are not included because they’re difficult to value. Also, differing national disclosure rules and practices make cross-border comparisons open to dispute.

Overall, the top 20 earned 59 percent more in 2006 than in 2005, and Ghosn’s package, boosted by options worth $43 million, accounted for almost all of that increase. His windfall came despite a lackluster year at Renault. Ghosn continues to enjoy a good reputation, but France’s press and politicians have hammered other executives who received big payouts for mediocre performance. One of the biggest whipping boys was Noël Forgeard, who took away $11 million when he lost his job as co-chief executive of EADS, the parent of Airbus.

Belinda Hudson of Mercer’s executive-compensation practice in London says that continental European countries are playing catch-up with Britain, where fat-cat pay scandals in the 1990s led to greater transparency. France, by comparison, remains wedded to stock options for tax and other reasons, and companies don’t face the same institutional-investor pressure. Jean Lambrechts, who heads executive compensation for Hewitt Associates in Paris, says that LTIPs are making some inroads but that old habits die hard and “the process is going to take time.”

One company that has changed is French insurer AXA (Charts). Its chairman, Henri de Castries, has announced that he’ll forgo his stock-option grant this year. De Castries is No. 7 on the list, with compensation of $12.1 million; options accounted for $7.6 million of that. If his Parisian peers follow suit, next year’s list may be much less French.

Europe’s Top 20 CEOs, Ranked by Total Compensation

* Not including LTIPs. **No longer in this position.


Europe’s Top 20 CEOs, Ranked by Total Compensation

Name, Title, COMPANY, Country, Total 2006 Compensation
in millions*

1. Carlos Ghosn, President/CEO, RENAULT, France $45.50

2. Jean -Paul Agon CEO, L’ORÉAL, France $19.30

3. Alessandro Prof umo, CEO, UNICREDIT GROUP, Italy $18.10

4. Arun Sarin, CEO, VODAFONE, Britain $15.20

5. Antoine Bern heim, Chairman, ASSICURAZIONI GENERALI, Italy $14.20

6. Josef Ackermann, Chairman/CEO, DEUTSCHE BANK, Germany $12.40

7. Henri De Cas tries, Chairman, AXA, France $12.10

8. Thiery Desmares t **, Chairman/CEO, TOTAL, France $10.80

9. Daniel Bouton
Chairman/CEO, SOCIÉTÉ GÉNÉRALE, France $10.70

10. Alfredo Sáen z, CEO/Vice Chairman, BANCO SANTANDER, Spain $10.60

11. Marcel Ospel, Chairman, UBS, Switzerland $10.50

12. Xavier Huilard, CEO, VINCI, France $9.10

13. Ser gio Marc hionne, CEO, FIAT, Italy $8.70

14. Beno ît Potier, Chairman, AIR LIQUIDE, France $8.00

15. Donald Shepard, Chairman, AEGON, Netherlands $8.00

16. Frederic k Godwi N, CEO, ROYAL BANK OF SCOTLAND, Britain $7.80

17. Mar tin Bouygues, Chairman/CEO, BOUYGUES, France $7.80

18. Franc k Ribo ud, Chairman/CEO, GROUPE DANONE, France $7.30

19. Fran z Humer, Chairman/CEO, ROCHE GROUP, Switzerland $6.90

20. Patric k Kron, Chairman/CEO, ALSTOM, France $6.70 

Source: Bordex
From the August 6, 2007 issue and its sister websites,,,,, and are all owned by John Donovan. There is also a Wikipedia article.

0 Comments on “ Europe’s fattest cats”

Leave a Comment

%d bloggers like this: