French Pension funds caps CEO pay to ? 1.7 million

The ERAFP, the French civil servants pension fund has taken the initiative of capping  CEOs compensation to the equivalent of 100 times the French minimum wage (SMIC).
By announcing its new Interim Guidelines for Engaged Shareholding on March 15th 2012, the ERAFP, which established a limit of 100 SMIC for CEO compensation, created a surprise and perhaps a historical milestone by overcoming an institutional investors’ paralysis.
Not only will ERAPF votes against the election of any combined Chairman & CEO, the sacrosanct French PDG, it will oppose all option plans at big firms. It will also request that 50% of board members of large companies be independent and have no more than three external positions.
Back in 2005 Proxinvest caused a scandal by stating that the socially acceptable CEO compensation should be equivalent to 240 times the French minimum wage. Needless to say, addressing CEO compensation was perceived to be somewhat of a taboo and the excuse found was then that it was too complex an issue, that it needed a special local personal appraisal by directors only said others, such as the author of the first 2005 ICGN set of recommendation on pay, the late Allistair Ross Gobey then CEO of Hermes and chairman of the ICGN. The relationship to performance was the issue not the amount paid which was not to be questioned by shareholders.
Faced with the complacent mechanisms of conflicted Boards, Proxinvest intended to give a collective solution to the problem of management compensation by establishing a cap, when each investment fund or asset manager and even individual shareholder will have their own quantified limits, abuses should be contained.
A public pension fund created by the French pension reform law of 2003, ERAFP has since 2005, managed the retirement benefit rights of French government and local authorities civil servants and of the staff of French public hospitals, through a fully funded scheme.

With 12 billion euros of assets and almost 4.6 million beneficiaries, 51,000 employers and contributions of more than 1.5 billion euros per annum, ERAFP is one of the world’s largest public pension funds in terms of members. Its CEO, Philippe Desfossés, is a seasoned investor. He considers that "western economies have been indulging themselves in cheap credit and over-consumption that their deleveraging is going to be painful and will last several years. In that respect, socially responsible investment will be a guiding principle for the 21st century."