This ones an interesting one for debate.
while SocGen is clearly a market leader in equity derivatives, its market share in commodities is approximately 1%.SocGen is offering a minimum of €30k in redundancy payments to its French investment bankers in an effort to encourage them to leave of their own accord.
Questions:
1. Is SocGen a leader in Equity Derivatives? How is this measured?
2. Would you take the money and leave? If yes, why? If no, why?
It's very difficult to fire an employee under French law. If you've got a good offer in hand, then it would make sense to take it. If not, suck that tit until its dry.
French labor laws are worse than anywhere I've ever seen in the world. You positively cannot fire someone. Even if you fire them for cause (like stealing, to use one example I know of personally), they will sue you for wrongful termination and the labor courts will rule in their favor.
Which is why you'll never go to labor court. Your insurer won't allow it. Your insurance company will reach a settlement with the fired employee before it ever gets to court and you will have no choice but to accept it. The settlement will be a multiple of the fired employees annual salary. You will pay your deductible, the insurance company will pay the balance of the settlement, and then they will promptly drop your coverage and send you scrambling for a new insurer.
I'm pretty much amazed every day I wake up and find that this country hasn't ground to a halt because it's so absolutely backward from any business perspective.
So, yeah, paying employees €30,000 to leave without suing is a bargain.
This is so true. The firm I work for invests globally with very few rules attached, but one of those rules is NO FRANCE. Doesn't matter how cheap the stock is, if it's French, we're not buying it. That goes for non-French companies that have substantial French exposure as well.
My favorite investing experience with France of all time was when I was researching a US company that was shutting its high cost footprint in France because they could no longer compete with non-France based manufacturing. I called the CFO to try to get a sense of how much cost savings this might provide and what that might translate to for the stock. He starts telling me how difficult it was to exit plant and lay off the labor -- apparently when the workers got notice, they went home, grabbed a bunch of weapons, and came back to the plant to hold management hostage in the back office at knife and gun point resulting in a 24 hour stand off with the authorities.
Seriously France, you are one crazy bitch. And not in the good way.
they are clear leader in derivs
Everything Eddie said. And SocGen pretty much wrote the book on Equity derivs. Getting a job in the field there is horrendously difficult. Virtually everyone on that desk came out of this master's program: http://www.masterfinance.proba.jussieu.fr/index2.php
Eddie, if France was business oriented in the way the US is, it would cease to be France!
Look, I love France. Otherwise I wouldn't live here. But it is just miserable doing business here.
For example, I went in to BNP on Friday the 9th to wire €50,000 into an American account. In the US, an international wire transfer takes no more than 24 hours, and can even be done the same day if you get to the bank early enough. When the money hadn't even left my account by the following Tuesday, I called BNP. They had no explanation for me but said someone would get back to me.
Never happened.
So I called back on Wednesday when I saw that the money still hadn't been taken out of my French account. It has now been 3 full business days since I authorized the wire in writing. I get the international wire manager on the phone and she informs me that she hasn't approved the wire.
I'm sorry, what the fuck did you just say to me? Who the fuck are you to approve a wire I authorized?
Wanna know her answer? In typical French banker fashion, she said the wire hadn't gone out yet because they didn't know why I wanted to wire the money.
How 'bout because I fucking told you to?
And this is typical, everyday commerce in France. A French businessman will readily give you a dozen different reasons why something that takes place as a matter of course every day in every other part of the world cannot be done here.
I love France. I love the food, I love the lifestyle, I even love the people. But I fucking hate doing business here.
Made me actually laugh
My guess is that you are speaking about "Prud'hommes", which is the court in charge of labor issues in France. Well let me tell you one thing : it is not that hard to fire someone in France - not that much people go in court if they are, and even if they do it is a painful process for both the employee and the employer so in many case nothing happens. Plus, if you are fired because of a "serious misconduct" you will not be paid any severance and you will certainly not win in court. While I agree it is much easier to fire someone in the US, do not think about France as a communist country ;)
Plus, you will never be dropped by your insurer because of someone you fire, or they will be no more insurance company with actual clients in France !
Being offered a minimum severance of €30.000k is very unusual in France, even in banking. The amount is great because SocGen really has to many employees (they hired a lot in 2010 in order to develop there M&A business and right now are admiting it was not such a great idea) and then really have to downsize.
Don't you get nice severance in the US too ?
I think this has more to do with French laws than with French-ness : banks cannot move such an amount of money without being given both the origin and the usage of the money.
Then how on earth is France one of the richest countries on the planet? Something must be right I assume.
That's pretty much exactly what a Frenchman would say.
We've had a good run investing in France... 2x net to our LPs on a hotel portfolio we exited in 2006.
What about France made a loot of money colonizing countries in Africa and Middle East. France money isn't organic.
I am not a Frenchman I am just really curious. I would be totally interested to know how on earth can you get 6 weeks starting vacation and 35 hours/week and STILL have world's best healthcare system, a vibrant industry, an energy policy that's not dependent on Middle East oil, largest aerospace/arms industry outside US and Russia, some of the largest banks in the world etc etc. Wtf?? The contradictions confuse. How can you maintain an awesome work-life balance and still be very rich?
They are French for godsake!!!
.
Actually, if you take a look at all the top French companies.. much of their revenues come from other countries.. not from within France.. that's what they are doing right.. using their perception of "luxury" and "chic" to capture business elsewhere. Doing business in France still sucks
The main danger France is in is letting it's labor laws take it the way of Italy and Spain. France is still a serious industrial power and unless they make some serious changes, they'll start losing ground fast.
This being said, some labor reform laws could go a very long way towards making France the dominant power in Europe (ex-Russia). Demographics in Germany are horrible and the way they've been playing the euro will blow up in their faces eventually. The UK has a great deal to lose as the focus of capital markets moves to Asia and the insane leverage the British economy is built on winds down.
Not much to add, no way I would take 30k to quit, you'd get much more by going to court. Spanish labour law is as bad as French, and so is Swedish and I think Norway's. The worse in Europe BY FAR is the one in Netherlands (much worse than France or Spain). But overall, it's much harder and more expensive to fire someone in the EU than in the US.
France ammended a law that stated that trusts folding french corporations will be subjected to disclose the beneficial owners.
The BOs all said in unison "fuck france"
Downside is that you also have to give something like 3 months notice if you want to quit in France.
i love the rhetoric in this thread and on WSO in general... laws that supposedly favour employees are "bad" or "worse"... ironic, considering most of you guys are (future) employees anyway! Almost as funny as the knee jerk GS/BB apologetics...
Bookmark this young monkeys... More likely than not, you will be screwed over by at least one employer during your career. I haven't yet, but I've seen it happen... You'll change your tune then.
I've been screwed over before but something has to happen to shake-up French labor laws. The system is currently designed around giving people temporary (1-2 years) contracts called CDDs in order avoid permanent contracts (CDIs) which make canning someone quite difficult. It reduces cyclical variations in unemployment but depresses employment from its natural rate. Unless France were to decide that going to war alongside the US was a great idea, they could probably sock away some significant cash during boom times with lower unemployment.
GoodBread,
so what? why not trade off a theoretical "natural rate" of maximum employment during boom times to having a less volatile unemployment situation, if this is indeed the trade off and not just some argument for dismantling labour's ability to cope with the economic cycle to boost corporate profits (labour market "flexibility" = cheaper labour for corporations to exploit).
i don't understand the last sentence in your post.
I don't have a horse in this race.. I don't work in France.
What I meant by my last sentence is that were France to loosen up labor laws, there's a chance that the increased tax revenue during boom times could be used to pay down debt and keep the country running a surplus, giving them more fiscal leg room during downturns (since they effectively have given up monetary policy levers to the ECB). It's not like France's unemployment rate the past decade has been all that great, we're talking 9-10% here, whether in good times or bad.
For a crazy data point, consider that France has the world's highest wealth per capita among large countries: http://tinyurl.com/4a99bej This is primarily due to real estate. If you were to compare real estate values in Paris to what the average Parisian is making, you would see that things are completely out of wack. People inherit much of their wealth in the form of apartments which they would never be able to buy with their savings from their own job.
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