The Bilger Example
Monday 18 August 2003
In an interview given Le Monde, Pierre Bilger, former head of Alstom, assures us that his decision to renounce his exit indemnities represents a personal gesture. One should not read it as a sign of the times, a sort of symbol of a new wisdom that's taken over certain company heads after a crazy period during which the big bosses, copying the Anglo-Saxon model, stuffed themselves with stock options, golden parachutes, retirement benefits and various other bonuses and indemnities.
Mr. Bilger's explanation is tempting because Alstom's story is unlike any other. An atypical story and an atypical CEO also, who made this decision without being in the least constrained to do so. One would be inclined to concur with Pierre Bilger's interpretation. However spectacular it is, this decision is first of all a reflection of a personality-"a certain conception of honor", he says. Jean-Marie Messier supplies the proof by providing the opposite example. The group he directed, Vivendi Universal, was also a thumbnail away from bankruptcy. And yet, in spite of that, the group's CEO, before being ousted from his position, got himself granted a golden parachute of some 20 million euros...
Nevertheless the Bilger decision goes beyond the individual case. It demonstrates the start of an evolution. Remember the relationship that obtained between the big bosses and public opinion at the end of the nineties: it was marked by an immense misunderstanding. More and more internationalized, the big French companies adopted Anglo-Saxon remuneration models, sometimes offering their senior management considerable amounts of stock options or fantastic golden parachutes. In a few years, France became the world's vice-champion of stock-option distribution, behind the United States, but before Great Britain.
Public opinion saw all this as nothing but an element in the widening of inequalities. Thus the outcry that was created in the business world like that aroused by the indemnities paid to Philippe Jaffr during his ouster from Elf, after Total's successful takeover. The rule of the time in CEO circles was clear: to live happily, live hidden!
The times have changed. With the crisis of confidence that has shaken world capitalism, stock-options have become the subject of the keenest criticism, to the point that several big groups, notably American ones, have decided to no longer use them. With the law the left voted in on new economic regulations, the obligation to publish Directors' remuneration was initiated. Starting this year, it's sufficient to consult a company's annual report to know the CEO's total compensation, almost to the euro.
That is not to say that there will be, if one might call it so, a Bilger precedent. But one feels that the climate of "crazy money" is about to change. And that one of moderation begins.
Translation: TruthOut French language correspondent Leslie Thatcher.
Jump to TO Features for Tuesday 19 August 2003