France’s stock market regulator is investigating a pay package granted to the former chief executive of cement maker Lafarge, Bruno Lafont, when the French cement company was bought by larger Swiss rival Holcim earlier this year.
The AMF said on Friday that it had referred the matter to its governance committee to examine the compensation.
Holcim merged with Lafarge in a deal worth $47 billion to create the world’s biggest cement maker earlier this year, called LafargeHolcim.
Lafont was originally supposed to become the CEO of the combined company, but was later pushed aside when the Swiss side of the deal renegotiated more favourable terms for Holcim shareholders. He became co-chairman instead.
The board in July gave Lafont a departure package worth 5.9 million euros, plus a bonus of 2.5 million euro, and allowed him to keep certain stock options and long-term incentives, according to the company’s website.
Lafont declined to be paid a salary for the co-chairmanship, the company added, although he will accept payment for attending board meetings.
“The college of the AMF examined the different elements of the pay given to Bruno Lafont related to his departure,” said the AMF, adding that parts of it appeared to diverge from the code of conduct on compensation set by France’s business lobby Afep-Medef.
“The AMF has decided to ask its governance committee to look into the matter,” the regulator said, confirming an earlier report in Les Echos newspaper.
A LafargeHolcim spokeswoman said it had received questions from the markets regulator and would co-operate with the committee.
“Lafarge believes that the handling of Bruno Lafont’s situation is legitimate and conforms (with the code),” said the spokeswoman. (Reporting by Pascale Denis; Writing by Leila Abboud; Editing by Andrew Callus)