EDF Chief Proglio Rejects Suggestions Hollande May Seek Ouster
Stock Chart for Electricite de France (EDF)
“I don’t get the impression EDF is a company in difficulty or that its management is being questioned,” Proglio, 62, said yesterday after the state-controlled company’s annual general meeting in Paris. “We have lots of projects.”
Proglio’s role at EDF could hang in the balance following calls from new President Francois Hollande to curb the country’s reliance on atomic power, UBS AG said last month. The CEO, who was present at former President Nicolas Sarkozy’s election celebrations in May 2007, has said pulling away from nuclear energy would cost jobs and raise power prices for consumers.
EDF’s 58 French reactors provide more than three-quarters of the nation’s electricity, a higher proportion than in any other country. Proglio has headed the utility since November 2009 after being named by the former government.
“Of course I feel comfortable” heading EDF, Proglio said yesterday. “I’m carrying on as if I was eternal. I’m making decisions with this in mind.”
While Hollande’s advisers denied there’d be a witch hunt of heads of state-controlled companies, his head of communication in February questioned Proglio’s support of incumbent Sarkozy and said his attitude during the campaign had been “totally abnormal.”
“Is the head of EDF, who has been campaigning beside Nicolas Sarkozy, really respecting what should be the balance of a top official or someone at the top of a big company?” communication chief Manuel Valls said Feb. 22 on France Inter radio. Proglio said yesterday he “hadn’t been listening.”
February also saw reports in Les Echos newspaper that Proglio had tried to use political sway to have former Environment Minister Jean-Louis Borloo installed as CEO of Veolia Environnement SA (VIE), the water utility he headed before EDF. Proglio had discussed ousting CEO Antoine Frerot with Sarkozy, according to Liberation newspaper and Le Point.
Since Proglio took the helm at EDF, its share price has dropped about 60 percent amid escalating costs for reactor safety measures and extending the lives of nuclear plants. EDF is also planning new reactors in the U.K., China and elsewhere.
“Proglio should be more proactive in terms of focusing on a new energy mix for EDF instead of just protecting nuclear reactors,” Peter Wirtz, a utilities analyst at WestLB AG, said by telephone from Dusseldorf. “Times are changing. Proglio doesn’t seem to be the one to do this.”
Hollande, elected May 6, named his government last week. The new Ecology and Energy Minister Nicole Bricq hasn’t yet outlined her plans for EDF.
“The management team at EDF may be replaced,” Per Lekander, an analyst at UBS, said during the election campaign. “A politician could be named.”
Proglio has also faced a backlash over an increase in salaries for EDF’s senior managers, which Hollande’s team described as “scandalous” before the election. Hollande pledged to limit top pay at state-controlled companies to 20 times that of the lowest paid workers.
Proglio earned 1.6 million euros ($2 million) in 2011, about the same as the previous year, and 60 percent more than his predecessor Pierre Gadonneix earned in 2007, according to the company’s annual reports. EDF’s operating staff earn an average annual gross salary of 25,500 euros.
The chief executive’s salary is determined by “objective criteria” including results and nuclear power production, Proglio told shareholders yesterday.
To contact the reporter on this story: Tara Patel in Paris at firstname.lastname@example.org
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.