Peugeot chief renounces $29 million pension deal after outcry

Wed Nov 27, 2013 1:40pm EST
 
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By Gilles Guillaume

PARIS (Reuters) - The outgoing chief executive of French carmaker PSA Peugeot Citroen (PEUP.PA: Quote) said he would forego his pension package after an outcry from government ministers and labor unions.

Peugeot has set aside 21 million euros ($28.5 million) for Philippe Varin's pension deal. The company is cutting more than 10,000 jobs as it struggles to recover from a six-year European market slump.

"Given the immense respect I have for our staff and the consequences of the difficult but necessary decisions I had to take, I have decided to relinquish the present provisions of my pension package," Varin told a news conference on Wednesday.

Varin acknowledged the "polemic and emotion" caused by his pension said the company's supervisory board would decide on the new terms of his departure after consulting a corporate governance advisory body in the French employers' organization.

The ministers and unions bristled at the fact that Varin, who will be stepping down three years before the end of his contract, would receive an annual 310,000 euro ($420,000) pension net of tax and social charges.

Peugeot announced this week that Varin would be replaced next year by former Renault (RENA.PA: Quote) No. 2 Carlos Tavares in a move that may help it secure new funding from Chinese partner Dongfeng.

Peugeot and Dongfeng are in talks to build on their existing Chinese joint venture with cooperation in other markets and a multi-billion-euro share issue that could see Dongfeng and France's government acquire stakes in the French carmaker, sources familiar with the matter have said.

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Philippe Varin, Chief Executive Officer of French carmaker PSA Peugeot Citroen, speaks to journalists at the Peugeot headquarters in Paris November 27, 2013. REUTERS/Benoit Tessier