(MENAFN- AFP) French unions and lawmakers united Wednesday to slam plans to award a 21-million-euro pension pot to Philippe Varin, the CEO of loss-making, state-subsidised carmaker PSA Peugeot Citroen.
Outrage over what was widely seen as an example of unacceptable executive largesse spanned the political spectrum, against a background of record unemployment and many workers being obliged to accept wage freezes to retain their jobs.
PSA itself has slashed its workforce in France, closed one of its oldest plants and redeployed hundreds of workers.
"We know of the sacrifices agreed to by the PSA employees," Finance Minister Pierre Moscovici said. Varin's pension plan was of an "inappropriate amount," the minister said.
"We know the financial situation of the group and that is why we want full transparency on the financial conditions concerning the departure of Mr Varin," he said.
Malek Boutih, an outspoken lawmaker from President Francois Hollande's ruling Socialist party, said ordinary French people were being "asked to tighten their belts while we are offering 21 million euros to this man."
Other politicians used words like "obscene", "scandalous" and "unjust."
Industrial Recovery Minister Arnaud Montebourg told AFP that the government had sought "serious explanations" from Peugeot over a decision that he termed "unacceptable and incomprehensible."
The far-right National Front said it was "sickened" and "astonished."
Facing calls from unions and others to forsake the money, Varin said he "understood" the reaction to the news but insisted the compensation was fair.
"When I leave the company, when that time comes, I will not receive any severance pay," he told France Info radio, noting that the 21 million euros ($28.5 million) would be used to fund a 300,000 euro annual pension and not be provided in a lump sum.
The 61-year-old Varin took charge of Peugeot in 2009.
The group announced on Monday that Carlos Tavares, the former number two of rival French automaker Renault, would succeed Varin next year, but Varin has not said if he will actually retire in 2014.
Varin's stint has seen the company mired in economic woes amid falling sales and Peugeot is in the throes of a radical restructuring involving deep job cuts and the closure of a factory.
It was also rescued last year by means of big state guarantees for its financing and credit arm, and posted a record loss of five billion euros ($6.8 billion).
"Obviously the company's situation needs to be taken into account, the sacrifices that have been made by employees and the fact that the state provided a guarantee of 7 billion euros," Moscovici said of the pension package.
According to a document drafted in 2012, Peugeot pledged to provide Varin with a pension fund worth 20.9 million euros after he leaves the group.
"To ensure the golden handshake of Mr Varin, PSA has already set aside for him the modest sum of 20.9 million euros," the CGT union said in a statement.
"Of course he must forsake it," said Jean-Pierre Mercier, a trade union member from the Peugeot plant in the northern Paris suburb of Aulnay which is being shut down.
Former minister Bruno Le Maire from the opposition centre-right UMP party of ex-president Nicolas Sarkozy said the sum was deeply inappropriate.
"To leave with a pension of this magnitude when one has failed as the head of Peugeot, when one has not been able to save jobs, when one has asked employees to make sacrifices, I find all this simply indecent," he said.
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