Shareholders of Grupo Stellantis have backed the 2023 remuneration package for the company’s CEO, Carlos Tavares, amounting to 36.5 million euros, in a non-binding vote on Tuesday.
This decision rejected the recommendations of proxy advisors Glass Lewis, Proxinvest, and Institutional Shareholder, making Tavares the highest-paid executive in the traditional automotive sector.
Specifically, 70 per cent of the group’s shareholders voted in favour of increasing the CEO’s salary at the shareholders’ meeting, nearly 60 per cent more than the 23.4 million he earned in 2022.
This includes a new incentive linked to achieving electrification and software objectives, at a time when Stellantis is facing increased scrutiny in countries like Italy and the United States due to workforce reductions.
Specifically, Tavares received a base salary of two million euros, supplemented by additional benefits such as company-provided transportation, tax compensation services, and insurance premiums worth 634,697 euros.
Additionally, he received a variable remuneration with short-term incentives of 5.78 million, long-term incentives of 26.12 million, and post-retirement benefit expenses of 1.94 million euros.
Of the 26.12 million euros in long-term remuneration, Stellantis details that this figure includes 11.8 million related to the company’s capital incentive plan and 14.2 million corresponding to the ‘CEO Transformation Incentive 2021 – 2025’ Award (10 million paid in 2023 for achieving “3 Innovative Milestones” and 4.2 million for the Shareholder Return Incentive).
“There’s a contract between the company and me, just like there are contracts for football players and Formula 1 drivers,” Tavares told reporters visiting a plant in Northern France on Monday, as reported by Bloomberg.
“Moreover, 90 per cent of my salary depends on the company’s results; this shows they’re not that bad,” he added.
In mid-February, the automotive group released its results, with net profits of 18.625 billion euros in 2023, an 11 per cent increase from the previous year, and announced that, in light of these results, it will distribute 1.9 billion euros in bonuses to its global workforce.
This support for Tavares’ compensation package comes after shareholders rejected the executive’s 2021 remuneration plan in a non-binding vote following opposition from French shareholders.
In contrast, last year, they voted 80 per cent in favour of the 2022 remuneration.
In Italy, the group resulting from the merger of the Italian-American Fiat Chrysler and the French Groupe PSA has been embroiled for weeks in controversy with the government of Prime Minister Giorgia Meloni over plans to reduce the workforce and relocate electric vehicle production to countries with lower production costs, such as Poland.
Stellantis and other mass-market car manufacturers, including Renault and Volkswagen, are struggling to produce affordable electric vehicles profitably, which is crucial for competing with Chinese rivals and avoiding a slowdown in the deployment of electric vehicles.
Last week, thousands of Italians joined striking workers near the car manufacturer’s base in northern Italy.
Stellantis aims to reduce its workforce in Italy by eight per cent, or approximately 3,700 jobs, according to the Fiom union.
In the United States, the company has begun laying off thousands of additional employees in Detroit, Toledo, and Ohio, and is cutting more positions in France, according to local union statements.
Personnel reductions, which contrast with increased executive remuneration and a higher dividend, may raise questions about remuneration practices “in addition to posing a potential risk to the company’s reputation,” as noted by Glass Lewis in a report last month.
Tavares, who is 65, aims to ensure that Stellantis successfully transitions to electric vehicles. Investors have rewarded the executive’s strategic moves, leading to a roughly 60 per cent increase in the share price last year.
Shares rose even as the company lost ground to rivals in several countries, including France and the United States, according to sector data analyst Jato Dynamics.
