Unions criticise France Telecom's high dividend policy

France Telecom's four main unions have criticised the company's commitment to pay a EUR 1.40 dividend over the next three years, blaming the policy for insuficient investment, AFP reports. The president of the operator's CGC-Unsa branch, Sebastien Crozier, said 'a promise of EUR 11 billion of dividends over three years is mad. If shareholders want fixed returns, they can buy bonds'. But at EUR 1.40 per share, this dividend amounts to 8.7 percent of the share price, much more than interest on bonds. France Telecom also pledged to give EUR 200 million to EUR 300 million of free shares to its 160,000 employees, representing EUR 1,200 to EUR 1,900 per worker, or almost one month of salary. This is nonetheless 12 to 18 times less than the EUR 3.7 billion annual dividend for three years, note the unions. While in favour of free shares for employees, the CFDT union launched a campaign against high dividends and stock-options during the AGM. Branch representative Claude Riche told AFP that with a combined 5 percent of equity, all employees were shareholders and should make their voices heard. CGC-Unsa backs the free shares plan if they are newly issued, but does not want France Telecom to increase its debt to repurchase shares and create short-term share price pressure. The CGT union denounced France Telecom's planned investment of EUR 100 million in its fibre optic network, describing it as 'largely insufficient'. A France Telecom operator would not comment on these criticisms, while stating that the operator aimed to deliver both a generous dividend and an ambitious social policy.