Peugeot Citroen boss gives up 21 million euro handshake after outcry

Philippe Varin, Chief Executive Officer, PSA Peugeot Citroen, 27 Nov.
Philippe Varin, Chief Executive Officer, PSA Peugeot Citroen, 27 Nov. Reuters/Benoit Tessier

 The outgoing boss of France's loss-making, state-subsidised car manufacturers, PSA Peugeot Citroen, announced on Wednesday that he would not take his 21-million-euro golden handshake after MPs and unions expressed outrage. 


After a day during which politicians queued up to criticise him, Philippe Varin called a press conference at PSA head office and read out a short statement, declaring "I have decided to give up the current provisions of my pension rights."

In a national context of record unemployment with many French workers settling for wage freezes to retain their jobs, news of Varin's payout had provoked incredulity.

He said he made the decision to turn down his payoff "because of the controversy this subject has stirred and the emotion around the country.”

French President Francois Hollande immediately welcomed the move.
"It was a wise decision, that is the least one can say," Hollande said during a visit to Spain.

He added "it was also the only possible one given the situation of the company, the efforts, not to mention the sacrifices, Peugeot employees have been asked to make, and also taking into account the guarantee given by the state" to prop up the carmaker's loan arm.

Varin had initially tried to defend the lucrative leaving clause.

"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 would be used to fund a 300,000 euro annual pension and it would not be provided in a lump sum.

Later in the day Varin said he would leave it up to the company's board of directors to decide on what would be an appropriate retirement payment.

The government had made it abundantly clear that 21 million euros was not a justifiable figure, with Finance Minister Pierre Moscovici calling it an "inappropriate amount".

Other politicians used words like "obscene", "scandalous" and "unjust".

Malek Boutih, an outspoken MP from Hollande's ruling Socialist party, complained that ordinary French people were being "asked to tighten their belts while we are offering 21 million euros to this man".

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.

Unions also denounced the size of Varin's golden handshake.

Peugeot announced on Monday that Carlos Tavares, the former number two at French rival Renault, would succeed Varin next year.

Focused heavily on Europe, Peugeot has seen its fortunes wane since Varin, 61, took charge in 2009. Sales in the region slumped under the impact first of the global financial crisis then the eurozone debt crisis.

The company has launched a radical restructuring cutting jobs and closing a factory, with the remaining workers having their pay frozen.

Last year it posted a record loss of five billion euros, it took a rescue package of 7 billion euros in state guarantees for its financing and credit arm.

Peugeot concluded a strategic alliance with General Motors last year, with GM taking a 7 percent stake in the French carmaker.

There has also been persistent speculation that it was seeking a capital injection from China's second biggest carmaker, Dongfeng.


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