Shocking”, “excessive” and “astronomical” were the three words chosen by the French president, Emmanuel Macron, to describe, a little less than a year ago, the remuneration of Carlos Tavares, current CEO of the Stellantis automobile group. Back then, in the spring of 2022, there was talk that the Portuguese executive would pocket, between fixed and variable, more than 19 million euros per year. This year the French president will in all likelihood have to expand his vocabulary.
Because Carlos Tavares last year has done even better. Thanks to the good results achieved by the company (which brings together, among others, brands such as Fiat, Jeep, Peugeot, Opel and Citroën) the Portuguese manager could earn around 23 million euros per year, in the case of meeting certain objectives, as several French media pointed out last week. It is as if the executive earned the average annual salary of a group employee every day.
A company spokesperson responded that Tavares' remuneration "is in line with that of the sector." 91% of his remuneration is variable. With which, as the same Portuguese executive recognized, "if my salary is high" this means that the company is doing well.
Indeed, Tavares' generous earnings are the fruit of an exceptional year for Stellantis, which closed with record profits of €16.8 billion. This executive's recipe, in the face of the technological transition and uncertainty, has been simple: raise the margin (up to 13%) and sell cars at a higher price, when the units delivered fell by 2%.
“It must be recognized that Tavares has been able to raise Stellantis, but the volume of cars is going down. And after presenting the record results, he announced two thousand layoffs in Italy ”, Stéphane Destugues, from the CFDT union, complained to this newspaper. “His salary from him is a huge amount. And the management privileges the shareholders at the expense of the employees ”, he maintains. Nor can it be said that Tavares has been unfair to the rest of his employees! The workers have benefited from an extra net premium of 3,882 euros. It is true that dividends of 4.2 billion euros were distributed to the same shareholders who voted against his maxi salary last year, but through a non-binding resolution (under Dutch company law, since the firm is based in the Netherlands).
"Is this remuneration justified, which is the highest of the large companies in France (and probably of the groups listed on the European Union stock market), for a person who is not the creator of the company, but is only its manager and therefore does not assume any risk or financial penalty or assume any personal responsibility? wondered minority shareholder Phitrust. To give you an idea, Luca de Meo, the top manager at Renault, moves far below, earning close to 6 million euros.
However, the remuneration of the Portuguese is below that of Mary Barra from General Motors (GM), which in 2021 entered 29 million. And we must not forget that Stellantis has had to pay Mike Manley, former CEO of FiatChrysler (FCA) 50 million euros that he had pending after the merger operation between the various brands that gave rise to the current group.
Controversies aside, Stellantis's strategy is now focused on electric, with a comprehensive approach. It is these days the news that it has sealed an investment of 150 million to buy 14% of a subsidiary of McEwern Mining that controls one of the largest copper deposits in South America, in addition to allocating another 146 million in three plants to produce modules of electric propulsion in the USA
Tavares (64 years old) is reputed to be a hard worker. They say that he has the habit of visiting dealerships to check in person the levels of customer service. Few would say that this handsome and inconspicuous man with glasses has tens of millions in his pockets.
