PARIS: The French government is working on a plan to push all companies that pay dividends to share more of their profits with employees, the budget minister said on Wednesday.
The measures, which are likely to affect listed and unlisted small to mid-sized companies, are to be included in a supplementary budget bill due in June. "The political aim is to improve the purchasing power of all workers," Budget Minister Francois Baroin told journalists after a cabinet meeting.
Finance Minister Christine Lagarde noted France already has profit-sharing rules for companies with more than 50 employees.
"When a company succeeds, it makes a profit, it pays shareholders. So it's also fair that it makes exceptional pay-outs to employees who contribute to a company's success," Lagarde said when asked about it at an unrelated news conference.
She said the measures would use tax incentives such as lower contributions to social charges to encourage companies to share profits with employees in the form of bonuses.
A year from a presidential election, President Nicolas Sarkozy's centre-right government is under pressure to boost households' purchasing power, which has been eroded by inflation and wages which have largely remained stagnant since the 2008-09 global economic crisis.
The government is being criticised by the left-wing opposition for softening a wealth tax, leaving it eager to show it is not only concerned about the interests of the wealthy.
"There are a lot of dividends now. We want the redistribution of companies' wealth to be fairer than it is now," Baroin said.
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