Executive pay abroad
France’s next business leaders, here at this business university will graduate into a new world. As the economic crisis drags on, some European leaders are demanding changes and want to lower executive pay and limit bonuses and severance packages. This economist says many executives are rewarded with large severance packages even when their company performs poorly, and this isn’t accepted well by the population. So France made severance pays a thing of the past when banks go under. In other words, France tied pay to performance, and France is not alone in this venture. This economist approves and says one way to fix this is to make board directors more accountable to investors. Not all of Europe is following suit, and Spain and Italy have been largely silent on this issue. This analyst says just a few people control the banks in Italy and they’ve created a climate where change is impossible. Those that are capping pay say compensation must be attached to performance.
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