Peugeot chief under fire over €21m pension plan

French unions and officials on Wednesday slammed plans to award a 21 million euro pension plan to the CEO of struggling carmaker PSA Peugeot Citroen, Philippe Varin. Finance Minister Pierre Moscovici called the amount "inappropriate" and urged Peugeot to "shed light" on the details of the deal. Facing calls from unions to forsake the money, Varin said he "understood" the reaction to the news but insisted the compensation was fair. "When I leave the company, when that time comes, I will not receive any severance pay," he told France Info radio, noting that the 21 million euros ($28.5 million) would be used to pay his 300,000 euro annual pension and not be provided in a lump sum. The 61-year-old Varin took charge of Peugeot in 2009. Peugeot announced on Monday that Carlos Tavares, the former number two of rival automaker Renault, would succeed Varin next year, but Varin has not said if he will actually retire in 2014. Varin's stint has seen the company mired in economic woes amid falling sales and Peugeot is in the throes of a radical restructuring involving deep job cuts and the closure of a factory. It was also rescued last year by means of big state guarantees for its financing and credit arm, and posted a record loss of five billion euros ($6.8 billion). "Obviously the company's situation needs to be taken into account, the sacrifices that have been made by employees and the fact that the state provided a guarantee of 7 billion euros," Moscovici said. According to a document drafted in 2012, Peugeot pledged to pay Varin a pension of 20.9 million euros after he leaves the group. "To ensure the golden handshake of Mr Varin, PSA has already set aside for him the modest sum of 20.9 million euros," the CGT union said in a statement. Jean-Pierre Mercier, a trade union member from the Peugeot plant in the northern Paris suburb of Aulnay which is being shut down, said the sum was "shocking". "Of course he must forsake it," he told the LCI television channel. Former minister Bruno Le Maire from the opposition centre-right UMP party of ex-president Nicolas Sarkozy said the sum was deeply inappropriate. "To leave with a pension of this magnitude when one has failed as the head of Peugeot, when one has not been able to save jobs, when one has asked employees to make sacrifices, I find all this simply indecent," he said.