PARIS – France's new Socialist government said Wednesday that it would oppose a €400,000 ($500,920) payout for Air France-KLM's former CEO, part of its push to rein in top-level pay at state-owned companies.
The payment for Pierre-Henri Gourgeon, who resigned in October, has already been approved by the executive board as compensation for the non-compete clause in his contract.
But Industrial Recovery Minister Arnaud Montebourg said that the state's representative would vote against the measure during Thursday shareholder's meeting.
"It's called decency in pay," he said as he came out of Wednesday's weekly Cabinet meeting.
The government holds a 15.9 percent stake in loss-making Franco-Dutch carrier and so does not have the power to block the payment by itself.
But a no-vote or an abstention would be a powerful signal that President Francois Hollande is serious about his promises to reduce economic inequalities and rein in corporations.
As part of his campaign pledges, he vowed to mandate that the highest salary in majority state-owned companies is not more than 20 times the lowest salary. Montebourg said the government would also try to impose the measure in companies where it is a minority stakeholder, like in Air France, but that in those cases it would have to persuade other shareholders.
The prime minister, Jean-Marc Ayrault, told French news magazine L'Express this week that the measure would even be applied to the salaries of executives already in their posts.
The global economic slowdown has weighed on Air France-KLM, which unveiled a plan to boost its productivity this month. The company is also trying to cut costs and is in the process of negotiating new employee contracts. While all airlines have struggled during the downturn, Air France-KLM was also beset by high debt and operating costs.
Associated Press writer Sylvie Corbet contributed to this report.