The general director of Stellantis, Carlos Tavares, attends the inauguration of a factory in Turin, April 10, 2024 (AFP / MARCO BERTORELLO)
A non-binding vote but closely scrutinized: the shareholders of Stellantis, at a general meeting on Tuesday, will give their opinion on the remuneration of Carlos Tavares, general director of the industrial giant, which is once again causing controversy.
Some 36.5 million euros is the total amount that the boss of the world’s fourth largest automobile group could receive, according to the company’s annual financial report.
This increase is notably linked to the payment of a bonus of ten million euros for the “transformation” of the group created in 2021 with the merger of PSA and Fiat-Chrysler.
The remuneration of Mr. Tavares, 65, includes retirement pensions which will be paid over the long term, but also bonuses awarded only if he meets the objectives set for 2025, the last year of his current mandate at the head of the manufacturer.
For the 2023 financial year, Mr. Tavares 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 a new record profit of 18.6 billion euros for 2023, up 11% over one year. Its turnover is close to 190 billion euros.
In 2022, the general director attracted the wrath of French President Emmanuel Macron, who judged the “astronomical” amount of his compensation to be “shocking and excessive”.
Stellantis 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.
– Abstention from the French State –
Unlike what would have happened if Stellantis’ head office was located in France, the shareholder vote will be purely consultative, the company being governed by Dutch law. The AGM will take place in Amsterdam from 2:00 p.m.
Shareholders had rejected Mr. Tavares’ remuneration for the 2021 financial year before validating it for 2022 at almost 80%.
The 5.6 billion euros announced will be used in particular to finance “Bio-Hybrid” technology, according to the automobile giant (AFP / JEFF KOWALSKY)
Several investor advisory firms have recommended voting against this year, including the American agency Glass Lewis which expressed “serious reservations”.
“We believe that significant increases in target CEO compensation in the context of mass layoffs may result in a disparity between executive compensation and the experience of stakeholders (customers, suppliers, shareholders, employees, banks, editor’s note),” underlined the agency.
Same analysis from the Proxinvest agency. Among CAC40 executives, “the median is five million” euros of remuneration, and in the United States this reaches 15 million, noted its general director Charles Pinel on BFM Business on Monday, questioning Mr. Tavares .
“Be careful, you are responsible for cohesion within your society” and even more broadly “of the capitalist system”, he added, judging the remuneration “too high”.
The CGT Stellantis, for its part, decried a “totally shocking and scandalous” salary equivalent to 100,000 euros per day, “an increase of almost 50%, when most of us had only 3.7%, and are struggling to end the month.”
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.
The largest shareholder of Stellantis is the Exor holding company of the Agnelli family (14.2%), followed by that of the Peugeot family (7%) and the French State via Bpifrance (6%).
The general director of the public investment bank, Nicolas Dufourcq, indicated at the end of March that he would “abstain on these questions of remuneration”, while “we have reached levels which are effectively American, for a group that is quintessentially American, but may indeed not be entirely understood in Europe.”