France: Obligations to disclose details of directors’ remuneration – SA companies

New rules are in force in France to require larger employers to provide a database to the French Works Council in order to effectively consult on the strategic orientation of the company. Inter alia, this database must include a detailed breakdown of the remuneration of individual directors of the company.

• The measures apply from 14 June 2014 for companies with 300+ employees (and from 14 June 2015 for companies with less than 300 employees).

• The information must cover the current year, the two previous years and the next three years – i.e. ultimately a six year period in total.

• For SA (Société Anonyme) companies, the obligation to provide remuneration information will require providing the following details relating to individual directors' remuneration: total remuneration and benefits of any nature paid during the financial year in question to each officer, including whether by way of stock, options etc. The report must also cover details of remuneration and benefits which the officer has received during the financial year from other companies within the Group which are subsidiaries of, or holding companies of, the entity in question.

• The report on remuneration must state which elements are fixed, variable and exceptional, setting out the criteria under which they have been calculated or the circumstances under which they were established. The information must also set out any engagements entered into by the employer in relation to remuneration, indemnities or benefits due in relation to taking up the office, its termination (e.g. any liquidated damages arrangements etc.) or change in the office.

The offices held by the individual in each group company must also be listed.

Actions for employers

The database of information must be put in place by the deadlines referred to above.

The obligation to provide such information may be particularly sensitive for employers facing the requirement to make collective redundancies and may give rise to an obligation to carefully manage employee relations.