The French government has dropped plan to impose a ceiling on executive pay in the private sector, but will go ahead with a two-year super-tax on firms paying million-euro salaries.
"After several months of dialogue, I have decided to focus our legislative action on the 75% tax on salaries above EUR1 million, which will be paid by the employer," French finance minister Pierre Moscovici told the daily Les Echos.
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"We will not go beyond that: there will be no specific law on the governance of companies," he added.
Moscovici said that instead the government was holding discussions with the business sector on the idea of letting shareholders have a say in director pay.
"Our aim is to avoid rooting the rules in law," he said. "We prefer to go with ‘a demanding auto-regulation’, but careful, if the decisions announced are not up to scratch we still have the possibility of legislating."
In June 2012, Moscovici announced plans to limit the salaries of French state companies to EUR450,000 per year. Moscovici said the measure was needed to "make state companies more ethical."
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By GlobalDataA move to cap executive pay won 83% support from French voters in a recent concluded opinion poll.
