France’s leading independent remuneration adviser joins us
12/12/2016
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Essere Associates is to join Guerdon Associates as a member of the Governance and Executive Compensation Network (GECN – see HERE).

Essere is the leading independent adviser on remuneration matters serving the company boards of France and the Benelux countries. Essere joining our organisation provides us with unsurpassed expertise in serving the global needs of our multinational clients. Believe this, because France is an unusual case among large Western economies.

True, France does have a non-binding vote on remuneration. And, following the UK, Switzerland and other European countries, it does face the prospect of a binding vote on executive pay if its conservative upper house, now sitting on the bill, gets a rude enough shock at the next wave of populism to pass the bill into law.

However, despite this, France has a very tame executive pay environment stemming from intractable conflicts of interest.

In the French version of capitalism, the institutional investors that steward the majority of stock in the largest French companies are the banks. And guess who these banks service for a big chunk of their revenues? Yes, those very same companies. Are they going to vote against the remuneration of executives who give them their fees? Not on your Nellie.

Independent advice in France for the very largest companies consists of management getting market data for a sample of similarly large companies. There is no requirement for advice, it seems, on whether performance requirements (if any) are reasonable for the large equity grants to French executives.

Fortunately, the interests of good governance are better served at the mid-size companies. While, as elsewhere in Europe, family interests hold large stakes, these stakes are not majority holdings, and so it is in all shareholders’ interests for their boards to receive independent remuneration advice direct from the adviser, unfiltered by management.

And Essere Associates is by far and away the most able executive remuneration adviser in the region.

We are delighted they are now part of the team.

For the Francophiles among you, catch up on what is happening in French executive pay see HERE.

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