The median salary of CEOs in the CAC 40 has increased by 60% over the past ten years, while the average salary in France has only risen by 14% during the same period. Despite regulatory oversight, the compensation mechanisms remain of a complexity rarely seen in other economic sectors.
In some companies, the variable part of the salary can account for up to 80% of total compensation, widening the gaps and fueling debates about the legitimacy of these amounts. These developments raise questions about the links between performance, responsibility, and recognition at the level of French corporate governance.
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How the salaries of French executives have evolved: historical benchmarks and current issues
Over the past forty years, the compensation of French executives has followed an upward curve that is thought-provoking. In 1979, a CEO of the CAC 40 earned on average 40 times the minimum wage. Fast forward to 2021, the average compensation of a CAC 40 executive reached 8.7 million euros, which is 453 times the gross annual minimum wage, and 228 times the average salary in the private sector. The following year, the average dropped to 6.66 million euros, but still remained 27% higher than in 2019. Meanwhile, employees of the CAC 40 saw their salaries increase by only 9%. The gap has never been wider.
It is the shareholders who give the green light to the compensation of CEOs, following a process where the board of directors designates the interested parties. This structure fuels criticism regarding salary fairness: in 2022, a CEO of the CAC 40 earned on average 130 times more than their employees. Oxfam France publishes a report each year that reveals the extent of these disparities. Other players, such as Scalens and Proxinvest, analyze trends and provide precise figures on the evolution of top executives’ compensation.
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On an international scale, France is not alone in seeing its executives soar to new heights. In 2021, CEOs of the German DAX earned an average of 15.4 million euros, while those of the British FTSE earned 13.5 million. Across the Atlantic, the threshold of 20 million euros is crossed among the 100 highest-paid American executives. In Paris, these figures fuel a deep reflection on equity and salary transparency. Take a look at emblematic cases, such as the compensation of the CEO of Orange: each company seems to write its own score, balancing social expectations and individual strategy.
But the debate does not stop at the amount of salaries. It questions what connects performance, responsibility, and redistribution. Today, 76% of the profits of the CAC 40 are redistributed to shareholders. France finds itself at a crossroads, between the Anglo-Saxon model, social imperatives, and citizen demands for greater clarity. The issue of corporate governance is now on everyone’s lips, shaking up old balances.
Between performance, ethics, and influence: deciphering the fair price of power in business
In the plush world of large French groups, the gap between the top and the bottom reaches unimaginable heights. Let’s take three striking examples from the analyses of Scalens and Proxinvest: Daniel Julien, CEO of Teleperformance, received in 2022 a salary 1,453 times higher than the average salary of his company. At Carrefour, Alexandre Bompard reaches a ratio of 426. Carlos Tavares, head of Stellantis, climbs to 341. These figures raise an unavoidable question: where to draw the line between legitimacy and justice?
This debate is not confined to the economic realm. It collides with ethical benchmarks and governance practices. Oxfam France, through the voice of Léa Guérin, proposes to regulate salary disparities and profit redistribution. Here’s what is on the table:
- a cap set at 1 to 20 between the executive’s salary and the median salary,
- a strict regulation of the amounts paid to shareholders,
- a specific tax on superprofits.
These proposals aim to place redistribution and social responsibility at the heart of decisions made by boards of directors.
Another issue emerges: the growing share of purely financial objectives in variable compensation. In 2022, 51% of total CEO compensation depended on exclusively financial criteria, compared to only 18% linked to other types of objectives, including 5% for climate. Immediate profitability takes precedence over sustainability and sustainable development, testing the social legitimacy of executive power.
Two dimensions structure the current reflection:
- Influence: Boards of directors remain predominantly composed of men from the same circles, which limits the diversity of viewpoints and impoverishes the strategic debate.
- Ethics: In the face of growing pressure for responsible governance, executives are encouraged to integrate social, human, and environmental issues into their way of managing the company.
France observes, questions, and sometimes grinds its teeth. But one thing is certain: the question of the fair price of power has not finished shaking up certainties, nor drawing new lines of division in the 21st-century company.