A majority of Stellantis shareholders voted to reject a proposed €19 million ($20.6 million) salary package for the company’s Chief Executive Officer (CEO), Carlos Tavares, and the company’s remuneration report for its other managers. Over 52% of the investor body, voted against the remuneration on Wednesday at its first “Annual General Meeting” after some (including some French investors) questioned the proposed excessive payouts to the Stellantis management.
In February, Stellantis in its annual report stated that the 2021 remuneration total for Tavares was €19.2 million ($20.8 million), of that, €16.8 million ($18.2 million) was direct compensation. Stellantis minority shareholder, Phitrust estimated the value of Tavares’ total compensation package awarded in 2021 to be around €66 million ($71 million). According to several sources, that would have made Tavares, the highest-paid CEO in the European auto industry.
Phitrust released an official statement on April 8th, stating the following…
“We voted against the company’s 2021 remuneration report, which puts Mr. Carlos Tavares’ remuneration for 2021 at €19 million, with the annual bonus alone amounting to €7.5 million, which is 3.8 times the base salary. Furthermore, it is stated in the LTI plans that the Chief Executive Officer has been granted free share plans in 2021, the fair book value of which at the grant date is €32 million. In addition, there is a new long-term remuneration payable in cash with a target amount of €25 million (with a maximum of €50 million).
Calculated according to the methodology of the French Autorité des Marchés Financiers (AMF) or AFEP-MEDEF French Code, based on the IFRS fair value at the date of grant in force in all major French groups, the total amount of the remuneration of the CEO of Stellantis granted for 2021 would amount to €66 million.”
A Stellantis spokesperson disputed the €66 million amount stated by Phitrust as “false”.
The Automotive News Europe reported that during a press conference on Tuesday, a French government spokesman stated “these are not normal numbers”, then spoke about the need for regulations regarding the matter in Europe. France, through the investment bank Bpifrance, holds a 6.15% stake in Stellantis and even has a member on the automaker’s board of directors.
Shareholders have increased their scrutiny of executive pay packages ahead of investor meetings.
In 2021, the fourth-largest automaker nearly tripled its net profit to €13.4 billion while total revenue improved 14% to €152 billion. The automaker, like others, benefited from cost reduction efforts and high prices due to the high demand for reduced dealership inventory resulting from a global semiconductor shortage and several supply-chain shortages.