Alcatel-Lucent cuts CEO's golden parachute under French pressure

Telecoms equipment maker Alcatel-Lucent said Friday it had chopped the compensation due to its former chief executive after the 14-million-euro ($15.8 million) payout caused an uproar in France.

The French-US company said its board of directors and former CEO Michel Combes had agreed to reduce his compensation to a maximum of 7.9 million euros.

The payout, coming as Combes jumps ship to a telecoms operator while troubled Alcatel-Lucent's buyout by its Finnish rival Nokia has not been completed, sparked a storm in France where executive compensation is a sensitive issue as unemployment hovers around 10 percent.

Combes had insisted that most of the compensation was not a golden parachute but instead a reflection of the increased value of the company's stock following the Nokia buyout, as like most executives he received shares as compensation.

He had renounced in April a 2.4-million-euro payment due to him when leaving the company.

However, the exit package not only provoked criticism from ministers in France's Socialist government but probes as well.

Alcatel-Lucent said it took into account recommendations from two government bodies as well as trade associations, including cutting a planned 3.1-million-euro payment as part of a non-competition agreement into line with the level prevalent in France.

Some of the compensation will also be made contingent on the successful completion of Nokia's purchase of Alcatel-Lucent.

But the French government kept up pressure on Combes.

Spokesman Stephane Le Foll said Combes had only gone half way and that "the figures certainly need to be adjusted some more" as he "had done something unacceptable".