Carrefour France's CEO Noël Prioux has announced an important reorganisation of his company's hypermarket branch. The 225 hypermarkets will be divided into three separate entities, based on their size. On the same day, Carrefour announced huge gifts for its current CEO Olofsson and his successor Plassat.
The separate entities will start to operate on 20 February and are inspired by Prioux's remarks that “a 18,000 m² hypermarket and a 5,000m² one require a different kind of management: the supply is different, as are the customer's expectations.” Prioux, who was the director of Carrefour France's hypermarket division until 2003, has issued a plan to boost Carrefour's suffering division. Their market share has decreased for four consecutive years, slipping to only 12% in January.
New trio to head new structure
The division means current director of hypermarkets Guillaume Vicaire will be succeeded by three directors; according to the French specialised website LSA Frédéric Duranton (director of the South-Eastern division), Philippe Lartigue (director of transformation plans) and Patrice Lespagnol (former CEO of the Greek and Romanian divisions).
Carrefour has not yet announced which director will be heading which entity, nor has it decided on the future of current head of French hypermarkets Vicaire. Analysts believe he will remain at Carrefour to assume an international role.
New CEO can earn up to € 3.75 million ...
Meanwhile, controversy has arisen over the salary of Carrefour's new CEO, Georges Plassat. Compared to his predecessor Olofsson, Plassat will receive a 11% raise to 1.5 million euro per year. If he meets certain business targets, his salary can be multiplied by a coefficient of maximum 2.5 – resulting in a maximum annual salary of 3.75 million euro.
On top of that, Plassat will receive 400,000 share options and, if he is forced to quit before 2 April 2015, he will receive one extra annual salary – including the variable part. As most directors do not survive for too long at Carrefour, it is quite possible Plassat will earn this impressive bonus.
... and current CEO receives triple farewell gift
Olofsson too receives a nice farewell gift from its current employer: on top of the estimated (and unconfirmed) half a million euro he will receive as part of his pension plan, he is paid 1.5 million euro if he does not join any of Carrefour's competitors in the following year.
This new agreement is rather surprising, as his current contract did not contain such a clause and Olofsson was not entitled to a 'Golden handshake', as he initiated the termination of his contract himself.
Moreover, Carrefour will allow Olofsson to cash the 395,000 share options he earned during his time at the top of the French retailer, even though the Swede only served three of the four years of his contract. The trade unions at Carrefour, who had to accept severe reorganisations in the last few years, will have some serious remarks regarding the farewell and welcome gift...