PARIS, Sept 1 (Reuters) - Departing Alcatel-Lucent Chief Executive Michel Combes’ pay came under further scrutiny on Tuesday as France’s AMF financial regulator said it was investigating whether the package respected governance rules.
Combes is leaving telecoms equipment maker Alcatel-Lucent ahead of its takeover by Finland’s Nokia and has been appointed as chief operating officer of telecoms networks operator Altice and chairman of its French subsidiary Numericable-SFR.
The executive came under fire after French weekly Le Journal du Dimanche said on Sunday that he could receive the equivalent of around $15 million in stock by 2018.
The AMF said it wrote to Alcatel to raise concerns about the terms of Combes’ compensation at the end of July, pointing to a lack of specific targets, as well as questions around severance pay, investors’ say and communication methods.
Alcatel rejected the AMF’s criticisms in a reply dated Aug. 31 and emailed to Reuters by the regulator, saying it had acted transparently and in line with guidelines.
AMF head Gerard Rameix said in a statement on Tuesday that the response “seems unconvincing in terms of good governance, or even in legal terms”.
He said he had asked AMF staff to investigate whether industry-standard governance codes had been respected, especially on investors’ “say on pay”, whether it was correct that Combes was not receiving severance pay, and whether a non-competition clause was lawful.
Economy Minister Emmanuel Macron added to the pressure when he told Alcatel Chairman Philippe Camus earlier on Tuesday that he did not approve of Combes’ decision to leave ahead of the merger with Nokia, according to an official in his staff.
The minister also said the company should wait for conclusions from the AMF and a corporate governance oversight body, the official added.
Combes defended himself in an interview with Les Echos newspaper published on Monday, saying he would receive a significant sum as he had agreed to maximise the variable part of his pay to reflect the risk of failure.
He said he had saved the company and created value for shareholders. Alcatel’s share price has risen from less than 1 euro before he took over on April 1, 2013, to trade mostly between 3 and 4 euros this year.
Nokia is paying 15.6 billion euros ($17.6 billion) for Alcatel-Lucent in a deal set to close by mid-2016. Camus was due to replace Combes from Tuesday until the transaction is completed. ($1 = 0.8873 euros) (Reporting by Matthieu Protard and Yann Le Guernigou; Writing by James Regan; Editing by Leigh Thomas and Greg Mahlich)