Peugeot CEO faces union-led calls to renounce pension

PARIS (Reuters) - PSA Peugeot Citroen's outgoing chief executive faced calls on Wednesday to give up part of his 310,000 euro (257,858.55 pounds) pension when he steps down in 2014, three years before the end of his current contract.

The French carmaker, which is cutting more than 10,000 jobs as it struggles to recover from a six-year European market slump, this week named a former Renault executive to succeed CEO Philippe Varin next year.

In keeping with company practice, Varin will receive no severance payment when he leaves the group, unlike most of his counterparts at other major French companies, Peugeot has said.

But French politicians joined criticism of Varin's pension, led by the CGT union, which drew attention to a 21 million euro provision in Peugeot's accounts to cover the future payouts.

Jean-Louis Borloo, a former minister who served in France's last right-wing government and now heads the centrist UDI grouping, said the pension plan was an example of "excessive" compensation packages.

"It has been known for executives to give them up," Borloo said. "The important thing is to save PSA."

France's Socialist-led government has yet to comment.

But Francois de Rugy, joint parliamentary chairman of the minority governing EELV party, condemned what he called "double standards" between the treatment of Peugeot executives and workers who recently made concessions on pay and conditions.

"This is too much," he said. "There's a whiff of indecency about it."

Varin has received no bonus since 2011, a company spokesman said, and his pension arrangements are more modest than those at other French corporations.

In last year's accounts, Peugeot set aside just under 21 million euros to cover its pension obligations to Varin as of December 31, 2012. The provision is designed to cover payouts of 310,000 annually over 25 years, net of tax and social charges, the spokesman said.

(Reporting by Laurence Frost; Editing by David Holmes)