This is remuneration which continues to be controversial… The shareholders of Stellantis, the fourth largest automobile group in the world, will give their opinion on the controversial remuneration of their general director Carlos Tavares, during a non-binding but particularly scrutinized vote this Tuesday April 16.
Story of a failure that has lasted for several years, causing reactions right up to the top of the French state.
Act I: arrested by Emmanuel Macron in 2022
Once again singled out, Carlos Tavares’ salary was already making people cringe in previous years. And this, up to the top of the State: already in April 2022, French President Emmanuel Macron had judged the “astronomical” amount of his remuneration for the year 2021 to be “shocking and excessive”. of 66 million euros, or approximately 3,500 years of minimum wage) distributed between 19 million in compensation, to which are added a free share plan of 32 million euros and long-term compensation payable in cash of 25 million euros.
In reaction, the President of the French Republic then spoke out in favor of establishing a ceiling against abusive remuneration for European bosses at EU level. “We must give ourselves ceilings and have governance for our Europe that makes things acceptable, otherwise society, at a given moment, explodes. People cannot have purchasing power problems […] and see these sums”, he then explained. The project has not come to fruition since.
Act II: from single to double
After having “descended” to the level of 19 million euros for the year 2022, the salary of the CEO of the Franco-Italian-American group is increasing once again this year. It will reach up to 36.5 billion euros for the year 2023, almost double, the group announced on February 23.
He will initially receive 23.5 million euros. Paid largely in shares, this remuneration also increases with the value of the group’s stock, which has almost doubled over the past three years. With its Peugeot, Citroën, Fiat and Dodge brands, Stellantis published on February 15, 2024 a new record profit of 18.6 billion euros for 2023, up 11% over one year. This staggering salary is also largely due to the payment of a bonus of ten million euros for the “transformation” of the group, born in 2021 from the merger between PSA and Fiat Chrysler. A reward after launching the production of electric motors and gearboxes for hybrid cars in Moselle.
A graph showing the net results of the group of 35 CAC 40 companies published as of February 29, 2024.
© / LAURENCE SAUBADU, SYLVIE HUSSON / AFP
Stellantis now argues that this remuneration should rather be compared with that of multinationals like Boeing in the United States (Dave Calhoun, $33 million for 2023). The group makes the majority of its sales in Europe, but draws most of its profits from the American market. This salary corresponds to “a contractual dimension between the company and me, as for a football player and a Formula 1 driver”, explained Carlos Tavares while traveling on Monday to the Trémery factory (Moselle), Monday 14 april. “If you think this is not acceptable, make a law and change the law and I will respect it,” he added.
A few days before announcing its boss’s annual salary, the automobile giant indicated on February 15 that it would redistribute nearly 1.9 billion euros to its employees around the world. In France, this represents a minimum of 4,100 euros for the lowest salaries. The group’s shareholders will receive around 7.7 billion euros for the 2023 financial year, between dividends and a share buyback program.
Act III: consultative vote of shareholders
A vote at the company’s General Meeting will therefore take place today in Amsterdam, where its headquarters are located, from 2 p.m. The group’s shareholders will vote on the amount of Carlos Tavares’ salary. The trend looks rather negative, but this vote is purely advisory because it is aligned with Dutch law. Shareholders had already rejected the CEO’s compensation for the 2021 financial year before validating it for 2022 by almost 80%.
This year, several investor advisory firms have recommended voting against it. The American agency Glass Lewis, for example, highlights the fact that “significant increases in the target compensation of the CEO in a context of massive layoffs can lead to a disparity between the remuneration of managers and stakeholders (customers, suppliers, shareholders, employees, banks, Editor’s note)”.
The group’s workforce fell by 12% to reach 242,000 employees worldwide, or 30,000 fewer employees in one year. The CGT Stellantis, for its part, decried a “totally shocking and scandalous” salary equivalent to 100,000 euros per day, or “an increase of almost 50%, when most of us had only 3.7%, and struggling to finish the month.