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Former CEO Carlos Tavares and Stellantis agreed to an exit pay deal below his €36.5 million package last year, losing much of his performance-based pay due to the company’s falling profits. automobile company.
An agreement on his salary structure was reached over the weekend in a “simple” process following Tavares’ resignation, according to two people with knowledge of the talks.
The package would be affected by the company’s poor performance this year, the people said, without elaborating, adding that calculations would be finalized later. Tavares’ 2023 package made him one of the highest-paid CEOs in the auto industry.
stellantis He said 90 per cent of the former chief executive’s remuneration was variable and was calculated based on the company’s performance at the end of the financial year. “The company is not in a position to know before the fiscal year closes and the figures are audited,” the company said.
“Even if we knew, we couldn’t reveal it. “We do not disclose the compensation of our employees except when required by law, as we respect their right to privacy,” he added.
Tavares abruptly resigned Sunday following disagreements with the board over strategy, a sharp drop in profits, large cash outflows and falling sales in the United States and Europe, prompting two profit warnings.
At a Goldman Sachs event on Wednesday, Stellantis Chief Financial Officer Doug Ostermann told investors that the conflict also arose from differences over how the company should interact with suppliers, unions and governments to rebuild trust.
But he added that the long-term strategic direction would remain the same. “I don’t think there have been any real disagreements in terms of long-term strategy,” he said.
Tavares’ pay package rose 56 percent last year thanks to record profits at the world’s fourth-largest automaker, but it was accompanied by job losses and pay cuts for workers in the United States and France. His package included €2 million in base salary, more than €2.5 million in benefits and €32 million in short- and long-term incentive payments linked to his performance.
As rumors circulated this week that his payout could amount to €100 million, the owner of the Peugeot, Fiat and Jeep brands responded by saying that “several figures in recent media reports on the financial conditions of Mr. Tavares’ departure are very inaccurate and are far from beyond reality.”
Tavares’ exit package will be made public in Stellantis’ 2024 annual report next year.
The financial terms of his departure have fueled a heated public debate in Italy, with politicians and unions criticizing the company for overpaying the 66-year-old at a time of crisis amid waning demand and potential job cuts.
Tavares “would leave with a rich loot of tens of millions of euros despite the [crisis at Stellantis]” Italian Deputy Prime Minister Matteo Salvini told reporters on Tuesday. Chiara Appendino, former mayor of Turin, where Stellantis has its Italian headquarters, said it was “indecent” for Tavares to leave with a large exit package while “thousands of workers struggle to make ends meet.”
More than 10,000 Stellantis workers have been laid off in Italy and production of models such as the electric version of the Fiat 500 has been put on hold.
Fabrice Jamart, CGT union representative at Stellantis, said two plants in northern France were also at risk of closure, amid concerns that production would move to lower-cost sites elsewhere in Europe. Last month, the company said it would close a manufacturing plant in Luton, UK, putting 1,100 jobs at risk.
People with knowledge of the company said Tavares had tried to reverse the massive cash outflows that Stellantis warned about in September through swift and radical measures that other board members believed would hurt the company in the long term.
Bernstein analysts said Tavares was likely interested in improving the company’s financial performance before resigning to create the conditions “for another strong payday like the one received by 2023.”