(MENAFN- AFP) France will legislate to curb executive pay if company bosses fail to, government ministers warned Thursday after a public outcry forced the head of carmaker Peugeot to renounce a generous pension pot.
Finance Minister Pierre Moscovici said PSA Peugeot Citroen CEO Philippe Varin had been right to waive his right to a pension for which the loss-making company had made provision of 21 million euros ($28.5 million).
"It was a wise decision," Moscovici said, echoing an almost unanimous reaction to the episode in the media and across the political spectrum.
"I've always said, and this is the government's position, that we first of all have to make sure that (self) regulation works.
"If it does not, then we will have to legislate. What happened yesterday does not change that."
Industry Minister Arnaud Montebourg, a champion of the left in the ruling Socialist Party, said the Peugeot board's approval of Varin's golden parachute showed that company bosses could not be trusted to exercise restraint during a time of austerity.
"There should be a bit more self-discipline among those awarding themselves obscene salaries and unacceptable perks," Montebourg told Le Parisien newspaper.
"But all the evidence points to that not happening."
Montebourg said France could take inspiration from neighbouring Switzerland, where voters backed a proposal to rein in golden parachutes for executives in a referendum in March.
But on Sunday the Swiss rejected a follow-up proposal which would have restricted bosses salaries to 12 times the lowest-paid worker in their companies.
Montebourg said pressure on Peugeot over Varin's package had worked because of the government's financial support for the loss-making company.
"For private companies, if self-discipline does not work, the legislature is perfectly entitled to proceed to regulation."
Varin, who is due to step down from his position at Peugeot next year, announced he was waiving his right to the controversial pension fund after the company's unions released the details and triggered a media furore.
The fund, which would have provided Varin with an annual pension of 300,000 euros after five years at the company, was considered particularly insensitive at a time when the company is losing money, shedding staff and being underwritten financially by the state.
Varin, 61, was also subjected to scorn over his record at the helm of Peugeot, whose fortunes have slumped since he took up his post in 2009.
President Francois Hollande, who famously declared during his election campaign "I don't like the rich", said Varin had made a wise decision -- "that is the least one can say."
In an indicator of the hostility Varin has inspired amongst some in France, far left leader Jean-Luc Melenchon on Thursday described the Peugeot boss as a "hoodlum".
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