French Government Renews Push for Broader Employee Ownership

Early in his administration, French President Nicolas Sarkozy proposed new legislation to encourage more broad-based employee ownership, but his political problems put that on hold. Now the worldwide financial crisis has given the concept new life. In a September 25 speech, Sarkozy called on French business leaders to voluntarily adopt new guidelines on executive pay, one of which would be to grant executive stock options only if the company also has an employee profit sharing or broad-based ownership plan. Sarkozy said that if industry did not voluntarily adopt these standards, the government would introduce measures to impose them. Companies have until the end of the year to adhere to the proposed guidelines. It is not yet clear whether the guidelines and, if needed, subsequent legislation, would apply to all companies or only companies of a certain size of or set of characteristics (such as publicly traded companies).