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France's taxes make CEO search harder, says Sanofi chairman

Weinberg tells former minister Arnaud Montebourgthat that tax burden is a turn-off for senior executives

Sanofi Chris Viehbacher 

France's high tax rates are making it harder to recruit top-level staff, according to Sanofi chairman Serge Weinberg, who is searching for a new chief executive to take over the company.

Weinberg, who is standing in as interim CEO at Sanofi during the search, told reporters yesterday that the tax burden in France - both from an individual and corporation-wide perspective - is a turn-off for international executives and also discourages expatriate French executives from returning.

"It is not forbidden to be patriotic in business [and] companies do have a nationality," he said, but added France's companies should not have to rely on "patriotic sentiment and goodwill" to attract top talent.

France is the home to 25% of Sanofi's staff and manufacturing facilities and 40% of its R&D operations, but generates 7% of sales, said Weinberg.

The comments were made in a debate with Arnaud Montebourg, the former Minister of Industrial Renewal and staunch proponent of economic patriotism who resigned from his position in the summer in protest at France's continued austerity policies.

Sanofi's former CEO Chris Viehbacher was sacked in October after six years in charge, with the company's board saying blaming the decision on increasing differences of opinion and a lack of communication over strategy.

There have also been suggestions that Viehbacher's Anglo-Saxon management style was at odds with Gallic sensibilities, particularly when his handling of the firm's group-wide cost-reduction programme resulted in a showdown with the French government and powerful trade union lobby.

The CEO's decision to relocate from Paris to Boston is also reported to have gone down badly with the rest of the board.

Weinberg stopped short of saying directly that the tax regimen was blocking the hunt for a new CEO, saying he was speaking in more general terms about recruitment. He also declined to comment on suggestions that the role had been turned down by Smith & Nephew's Olivier Bohuon, who was rumoured to be the board's preferred candidate.

Kickback claims

Meanwhile, a whistleblower lawsuit filed in the US is claiming that Viehbacher and other executives at Sanofi paid $34m in kickbacks to hospitals and doctors to encourage the prescribing of its diabetes drugs.

The suit has been filed on behalf of Diane Ponte, a former Sanofi employee who was sacked by the company in September. In a statement, Sanofi insisted the suit is without merit, saying: "Ponte is a disgruntled former employee who is opportunistically attacking our company."

"We take this matter very seriously and will protect our company and our reputation," it added.

Article by
Phil Taylor

5th December 2014

From: Sales, Regulatory



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