Renault has announced a new profit-sharing policy based on the relation between the group’s actual and budgeted operating margin.
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In France, this policy takes the form of a group agreement, which was signed on 18 December by four trade union organisations and is effective for three years from 1 January.
The system will apply to Renault and French subsidiaries in 2008, followed by all world regions in 2009. Previously, only French Renault employees were included in the incentive system.
From 2009 the total amount will be shared between all subsidiaries on a prorata basis according to payroll costs.
Profit-sharing totals will now be based on the annual operating margin. The new calculation method will be introduced in two steps. In 2008, the total amount to be shared will be based both on net income and operating margin. In 2009, this amount will be based purely on the relation between actual and budgeted operating margin.
Previously, incentive system totals were calculated in relation to net income.
Renault’s first incentive system was signed in 1987 and since renewed seven times.
