Carrefour: governance remains to be improved

Phitrust has put at Carrefour’s AGM agenda several written questions concerning Governance issues.


1. Compensation of Executives

Through these written questions, Phitrust has alerted Carrefour shareholders at the AGM on the attribution of George Plassat’s non-competition compensation, which gave the impression to be a disguised retirement benefit, and therefore does not respect the French Afep-Medef Governance Code, as he ceased his duties as Chairman and CEO at the age of 68. Following the AGM, Phitrust noticed that the ex-CEO has waived this non-competition compensation of €3.9 million.

The contribution of other shareholders, stakeholders, of the AFG (French Asset Management Association), HCGE (High Committee on Corporate Governance) and of the French Minister of the Economy and Finance, Bruno Le Maire, have collectively contributed to this achievement.

However, George Plassat will still benefit from a high compensation package of approximatively €9 million for 2017, in addition to an annual retirement allowance of €520,000, while leaving Carrefour in serious difficulties.

We considered that the compensation packages voted by shareholders at the Annual General Meeting for Alexandre Bompard remain out of line with the social and economic reality that the Group faces. It seems inappropriate to adopt such high fixed and variable compensations considering the commercial difficulties encountered by Carrefour.


2. Lead Independent Director

The Lead Independent Director, Philippe Houzé, cannot be considered as an independent Board Member as he represents Carrefour’s reference shareholder with 16% of voting rights. The Board of Directors has not taken into consideration Phitrust’s recommendation of nominating a Lead Independent Director exempt from any conflict of interest, taking into consideration the non-separation of executive roles, which would have been more efficient and in line with the AFG’s recommendations on Corporate Governance.


3. The take-back conditions of Carrefour’s employees brought to franchisees

Phitrust has questioned Carrefour on the take-back conditions of Carrefour’s employees, who will be brought to join 5 lease-management process shops in France. It seems that the Group has listened to unions’ and shareholders’ requests to provide accompanying mechanisms that are more favourable than those previously planned by the restructuration plan.

Phitrust noticed that the votes in opposition concerning the resolutions on executive compensations was high (from 25 to 32% vote against depending on the resolution) taking into consideration the fact that 29% of Carrefour’s capital is held by 3 reference shareholders possessing 38,5% of voting rights, and noting that the participation rate at the AGM was of 62%.


Phitrust hopes to continue its discussion with Carrefour executives and Board Members, as well as those of other companies belonging to the CAC40 index on governance and Corporate Social Responsibility issues. We are convinced that those businesses with the best social and financial performance are those that are able to consider the expectations of its employees and shareholders.

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