The question of the impact of the French elections over local and European corporate governance is now more pressing as the election of François Hollande might trigger a real change in the rules of the game.
While both Nicolas Sarkozy and François Hollande favor the say on pay annual vote and both of them recommend the contricbution of an empoyee representative at the Remuneration Committee, much more would come if the Socialists wins the elections following a Hollande victory.
First, not to be neglected, this socialist candidate is generally recognized for pretty sound personal ethics and no reputation for self-dealing: if Sarkozy did not mess around as President he is however recognized for his fascination for money making with moderate insight into the methods…
Second, François Hollande intends to reform banking while Nicolas Sarkozy was not convinced about the merits of such reform.
It is still unlcear weither such socialist reform would be more ambitious than the Vocker targets and faster than the Vickers methods. François Hollande is supported on this by most of the socialist leaders, including Martine Aubry, Segolène Royal and Arnaud Montebourg (who besides recommends to open bank Boards to bank clients); close aides economics advisor Michel Sapin or AMF chairman Jean-Pierre Jouyet appear both more conservative on this but several other such as Didier Migot, chairman of the Cour des Comptes and his successor as chairman of the Finance committee of the House Jerôme Cahuzac, might be more in favour of a split alike former socialist bank Chairman and advisor Jean Peyrelevade.
If the asset-management functions would no longer be associated with banking the corporate governance landscape would be immensely changed. But beware : some 1500 bank lobbyists in Paris and Brussels are actively opposing !
Other but more minor changes should expected by a Hollande presidency such as some prohibition of stock options and some control of CEO pay and bank bonuses, but the methods to achieve these are not yet clear.
Finally, sharehodlers will be more taxed by the winner, even worse both canddiates looking for tax revenues have joyfully adopted a not so clever tax on financial transactions which will certainly be put in place soon here.
Proxinvest April 24 th. 2012
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