Editorial of the “World”. Shareholders sometimes have more common sense than boards of directors. That of Stellantis has decided to apply to its CEO, Carlos Tavares, a compensation mechanism that defies gravity. The leader of the car manufacturer resulting from the merger between PSA and Fiat-Chrysler could receive several tens of millions of euros depending on the achievement of objectives set for him by 2028.
In 2021 alone, Carlos Tavares’ compensation amounts to 19 million euros. The shareholders gathered at a general meeting on Wednesday April 13, to everyone’s surprise, voted against this device, when employees are asked to redouble their efforts to make the transition to the electric vehicle.
The skills of the leader are not in question. Under his leadership, the group was able to carry out a complicated merger in a turbulent context due to the health crisis. In 2021, the company generated 13 billion euros in profits, making Stellantis one of the most profitable manufacturers in the world.
But, when the evolution of the remuneration of Mr. Tavares reaches stratospheric levels, that of the employees remains strictly framed. While the inflation rate has already reached 4.5% in France, the workers have been awarded a 2.8% increase as well as a profit-sharing and participation bonus of around 4,000 euros.
Massive support for the economy
That a leader is generously paid may seem legitimate, when the results are there. What is less so are the remuneration policies which give the feeling that there are no limits to the value of merit. It would be a question of rewarding exceptional skills in a very narrow executive recruitment market. But the law of supply and demand does not allow all excesses. The proof: for 2021, the boss of Toyota receives six times less than Mr. Tavares and that of Volkswagen twice less. Stellantis preferred to align itself with the levels in force in the United States, where almost everything is permitted.
A company cannot be disconnected from the social context in which it operates. If some have been able to post solid performances in emerging from the health crisis, they owe it not only to their management but also to the massive support for the economy, thanks to public money.
This controversy is wrong. Economic circles are rightly worried about the consequences of a victory for Marine Le Pen in the presidential election on 24 April. This perspective should encourage directors not to further feed the ambient populism by showing moderation in executive compensation policies.
The shareholders of Stellantis had this flash of lucidity. But their opinion is only advisory, according to Dutch law where the company is registered. Six years ago, those of Renault had already spoken out against the remuneration of Carlos Ghosn proposed by the board of directors, which had ignored this refusal. This pretense of shareholder democracy is all the more shocking as the State is present in the capital of the two manufacturers. Despite his opposition to these remunerations, he is reduced to powerlessness.
In a context of rising inequality and rising prices that makes the question of purchasing power inflammable, the sums proposed by the Stellantis council are not only indecent, they undermine our social contract. Capitalism would like to saw off the branch on which it sits that it would not do otherwise.