Saturday, December 23, 2006

In Paris, "Wall Street" Bonuses are "Hush Hush"

Another article in the French press details how things happen in a country where having more money than most is a sin. The French wealthy don't necessarily try to hide their riches from the tax man (some just leave the country); but they sure don't want to flaunt them in the face of a nation that considers the boss as the enemy and the rich to be thieves. It just might incite a neighbor's jealosy and land them in front of the French equivalent of an IRS audit.

bourse de Paris
[Thanks to for this photo of the former French "Place de la Bourse" (Wall Street)]

Nicolas Cori describes the French situation thus (my translation):

"In France, it's the Grand Taboo. While in the US the banks announce with pride the list of the highest bonuses as a sign of good financial health, most of their French counterparts skitter along the baseboards. 'We're not very chatty about employees' bonuses,' admits a porte-parole of the bank BNP Paribas. 'We don't give any details on the subject,' adds the Societe Generale (another major French bank.) Only the salaries of the major company position holders (CEO and Director) are published. But this absence of transparency does not mean that French traders are protected from the Anglo-Saxon excesses. Simply put, the figures remain confidential.

Even for the trade unions. 'For the bonuses, it's always cloudy,' complains the CGT of the Societe Generale. 'We don't know the amount, hidden under the chapter "Bonuses and Miscellaneous Benefits." We don't even know the number of beneficiaries, the number of non-recipients, or the average.' Management refuses to give any more details, explaining that 'this doesn't enter into the domain of salary negotiations,' according to Alain Treviglio of the CFDT for the Societe Generale. 'For management, the bonuses are "discretionary,"' he smirks.

"Millions! The few leaks there are tend to justify their suspicions. In 2000, the CGT of the Credit Lyonnais revealed that the Derivatives Department head received 10 million euros. His sidekick got 7 million. 'Scandalous and anti-citizen," declared the bank's CFDT representative; and as the CGT wrote in a letter to the CEO of the bank: 'Dear Mr. President, We too want to earn millions!'

Six years after this episode, we can imagine that such sums have become small change. At the Societe Generale, for example, the CEO Daniel Bouton (3.18 million euros in 2005) states that he is in about 50th position on a worldwide earnings scale. Given the level of across-the-[English] Channel salaries, French traders would have no difficulty threatening to leave for a London bank to force their management to kick it up a notch....

"... 'Everyone pretends to be unhappy [with his bonus], for fear of receiving less the next year.' ... 'No one admits how much he received.' Injustice reins. Inside a particular department, the managers can decide to give nothing to someone they dislike. And it's always the same departments who are privileged. The front office (notably, the traders) area always in front of the middle office and the back office (who maintain the follow-up market operations.)

"But even with these excesses, the system is accepted by the employees of the finance industry, because each one takes a piece of the action at his own level. 'In every department where I've worked, there were annual bonuses,' says Etienne, seven years of experience in the middle office of Societe Generale. 'In 2005, while my salary was 40,000 euros, I received 15,000 euros as a bonus.' That would certainly help to put up with quite a few injustices."


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