EDF Staff Perks Cost $867 Million a Year; Auditor Faults BonusesTara Patel
Electricite de France SA staff perks cost the state utility an “exorbitant” 645 million euros ($867 million) a year, and managers are allowed to retain bonuses even as shares fall and debt increases, the government auditor said.
Salaries have also risen on average by at least 3 percent a year since 2005, faster than inflation and salary increases at private companies, the Cour des Comptes said today in a report.
The study comes two days before the nuclear generator says it will unveil about 1 billion euros of cost cuts at its annual results. EDF, which supplies three-quarters of French power, is suffering delays and cost overruns in developing a new reactor and needs to spend billions of euros on maintenance and to meet tighter safety rules imposed after Japan’s Fukushima meltdown.
EDF should curb heating and housing benefits for workers at the company, its distribution unit and the grid, while managers’ bonuses need to be linked to performance, the auditor said.
EDF will review its bonus policy, the company said in response. While the perks need to be “modernized,” many are enforced by law and beyond the company’s control, it said.
Heating costs for the utility are about 381 million euros a year, including 222 million euros for EDF, 129 million euros for distribution unit ERDF and 30 million euros for the RTE grid.
Staff pay about 16 times less than regular customers for heating their main and vacation homes, under rules that date from 1951. Employees also aren’t limited in their consumption.
Housing costs, for 13,000 residences, totaled 264 million euros in 2011 with only a third of the homes used by workers on call who need to be close to their workplace, according to the report. The study also criticized benefits offered to families.
Employees at EDF and GDF Suez SA, the former gas monopoly, have benefited from lower rates for power and gas since before World War II. The two utilities tried to revise the tariffs in 2011 and backed down after unions called strikes in protest.