Stellantis CEO Hefty Compensation Package Sparks Controversy

Despite Stellantis’ recent efforts to trim its workforce and navigate the challenging transition to electric vehicles (EVs), CEO Carlos Tavares finds himself in the spotlight once again, this time over his eye-popping €36.5 million ($39 million) compensation package. The substantial increase in Tavares’ pay, up nearly 60% from the previous year, has drawn criticism from shareholder advisory firms and raised eyebrows among investors.

At the heart of the controversy is a new €10 million ($10.7 million) incentive award tied to meeting electrification and software goals, which some argue is excessive given the company’s cost-cutting measures and tough savings targets. Advisory firms Glass Lewis and Proxinvest have urged investors to vote against approving the package, citing concerns over the disconnect between executive pay and the company’s workforce reductions.

Glass Lewis, in particular, has taken issue with the additional incentive award, questioning its necessity and alignment with market standards. “We note that such a bonus is out of step with market practice,” the firm stated in a report. They also raised doubts about the performance targets used by Stellantis to justify the hefty compensation package, suggesting they may not be sufficiently challenging for executives.

In response to the criticism, Tavares defended his compensation, likening it to contracts for professional athletes. “There’s a contract between the company and myself, just as there are contracts for soccer players and for Formula 1 drivers,” Tavares remarked. He emphasized that a significant portion of his salary is tied to the company’s performance, indicating confidence in Stellantis’ trajectory.

However, the optics of Tavares’ soaring paycheck amid layoffs and production shifts have sparked outrage among workers and raised concerns about the company’s reputation. Thousands of Italian workers have protested near Stellantis’ base in northern Italy, voicing opposition to plans to move EV production elsewhere and reduce the workforce. Similarly, in the U.S. and France, layoffs have prompted backlash from local unions and workers, who decry increased workloads and inadequate conditions in certain plants.

Source: Automotive News