Sanofi Chairman says French tax burden a killer for attracting execs

Former Sanofi ($SNY) CEO Chris Viehbacher's inability to remain discreet about his frustrations with doing business in France were said to be a big part of his undoing at the drugmaker. But now, Chairman Serge Weinberg, who must replace Viehbacher after ousting the outspoken CEO, has publicly expressed his own exasperation with France, saying its high taxes have made it hard to attract talent.

"It's extremely difficult to attract international executives or even bring back French ones who have left," Weinberg told reporters, according to Reuters. Weinberg said he was speaking generally and not about the CEO search but there have been reports that the job search has been going poorly.

Weinberg would not discuss reports that he has tried, and failed, to entice Olivier Bohuon, CEO of devicemaker Smith & Nephew ($SNN), to take on the job, Reuters reports. Sanofi has reportedly also offered the CEO job to, and been turned down by, Pascal Soriot, the French CEO of AstraZeneca ($AZN).

Bohuon and Soriot are both French. Weinberg has dismissed the idea that Viehbacher's nationality, German/Canadian, factored into the decision to can him. Still, it is generally believed that Viehbacher's blunt Anglo-Saxon management style, as PMLive describes it, was a key factor in his dismissal in October.

According to PMLive, Weinberg's remarks came in a debate with Arnaud Montebourg, the former Minister of Industrial Renewal in France. Montebourg was one of the loudest critics of a move by Viehbacher to eliminate 2,300 jobs in France as part of cost-cutting move. He said at the time that a company that is making money should not act like one that is in trouble. The dust-up over the plan led Viehbacher to retreat, bringing the reduction down to just 900 jobs. One of his targets was the R&D site in Toulouse, France, that Viehbacher publicly pilloried for not having developed an important drug in 20 years. Just this week Sanofi said it would turn over the site, and employees, to outsourcing firm Evotech in expectation that the German company could boost drug development there.

But in his public discourse with Montebourg over the French tax burden on companies and executives, Weinberg pointed out that while France accounts for only 7% of its sales, it is home to 25% of its employees, 40% of its R&D operations and a quarter of its manufacturing facilities.

"It is not forbidden to be patriotic in business [and] companies do have a nationality," Weinberg said, but cautioned that French officials better realize the effect of the country's high taxes on being competitive in a global market. "There will be consequences if this continues, because we can't rely on patriotic sentiment or goodwill alone."

- read the Reuters story
- get more from PMLive

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