Viva La France

Viva La France

Oliver Brandicourt, the new CEO for that soap opera known as Sanofi (NYSE:SNY) does not officially begin his tenure until April 2nd yet his selection is already generating controversy.  It’s well know that Brandicourt was not the company’s first choice and that several other candidates either rejected Sanofi’s overtures or said flat out they weren’t interested in the position. To his credit Brandicourt knew he had leverage and wrangled a nice little pay package from our good buddy Serge.  It is this pay package that is generating the controversy and points to just how difficult it is to be CEO of a soap opera based in France.

It seems that the French government isn’t all too pleased with Brandicourt’s pay package which includes a nice little signing bonus of $4.5 million. According to a Reuters story published this morning;

“Government spokesman Stephane Le Foll blasted the package for the new boss of France’s largest listed company as “incomprehensible”.

“These people, when they have hardly taken the reins of a company – which is to say they haven’t yet taken any risk – are already assured to get a disproportionate package,” Le Foll said on RTL radio.”

The story goes on to state:

“Le Foll, who is also the farms minister, said it could also make rules for private firms, although it was up to them to show “a bit of ethics”.

Senior government minister Segolene Royal weighed into the debate with harsh words, also saying “some self-discipline is needed.”

“Drugs are reimbursed by taxpayers, so it’s all of the French people who pay into the health system and reimburse drugs who are going to pay the golden handshake,” Royal said on BFM TV.

“Some decency is in store, especially from a pharmaceutical company that lives off the social security system,” added Royal, who is energy and environment minister.”

So not only does Brandicourt walk into a soap opera which seems to be turning into a three ring circus but he hasn’t even done anything and the farms minister plus the energy and environment minister are blasting his pay package. Is it any wonder that it took so long to find a CEO? Does it surprise anyone who’s been following this soap opera that Brandicourt took advantage of the situation? Is this just not one more example of the brilliance of Serge Weinberg?

Now the company is claiming that signing bonus really isn’t a bonus at all and is merely meant to keep Brandicourt whole as he would have earned this amount had he stayed at Bayer. This may well be true and quite frankly isn’t all that unusual in these days of high priced CEO’s. However the fact that this package has turned into a political football shows the problems Brandicourt will face as he tries to turn this three ring circus back into a pharmaceutical company. It also shows that Serge and the board as we feared are really the ring masters as they have been notably silent on this controversy. Must be nice knowing that the board that just hired Brandicourt can abandon him so quickly, instead of watching his back they decide to stab him in it.

It will be interesting to see how or if Brandicourt responds to this controversy and the lack of support from the board. Will he make some token gesture to please the wine drinking ministers who seem to believe there is something criminal when a CEO is well compensated: even when that CEO hasn’t produced anything at all. As much as these ministers may not like it this is how things roll in today’s world. Their response also shows that politicians are the same everywhere, that these ministers just love hearing themselves talk and have never meet a microphone or TV camera they didn’t like. The fact is what really bothers these ministers is they aren’t the ones making the millions. Like politicians everywhere they have no clue how things work in the real world.

Yet they do have something in common with our buddy Serge as like Serge they have a serious case of foot in mouth disease. Yes we just love when the old saying – better to be thought a fool than to open your mouth and remove all doubt – is proven correct yet again.

Considering the circus he’s signed on to run Diabetic Investor actually believes Brandicourt is under paid. Frankly we’re not sure there is any way he can be properly compensated given all the issues, both internal and external, he must deal with.

Diabetic Investor like everyone knew that whoever replaced Viehbacher would be facing a difficult path. That to truly solve the issues facing Sanofi the CEO must be allowed the latitude and support to make tough decisions. Decisions which will surly ruffle the feathers of the ultra-sensitive French government, a government which seems to believe they are Sanofi stakeholders and have a say in how the company is run.

Yet given their silence it’s obvious that Serge and his fellow board members will throw Brandicourt into the deep end of the pool and hope he’s a good swimmer. For if he’s not don’t expect Serge and the board to throw him a life preserver, an anvil perhaps, but no life preserver. Viva La France!