Stellantis CEO Carlos Tavares Receives 56% Pay Rise

Stellantis chief executive Carlos Tavares saw his remuneration surge by 56 per cent to €36.5 million in 2023, positioning him among the industry's top earners. This substantial increase follows challenging pay negotiations with US unions, which impacted the company's profitability.

Tavares's elevated compensation primarily stemmed from bonuses tied to long-term objectives. Despite these negotiations, Stellantis, the parent company of renowned brands like Peugeot, Fiat, and Jeep, has consistently ranked among the automotive sector's most profitable entities in recent years.

However, Tavares's substantial pay raise has sparked contention with French unions and shareholders. In 2022, shareholders expressed their dissent by voting against his compensation package during the company's annual meeting, albeit in a non-binding capacity.

Comparatively, Tavares's total pay for 2023 stood at €36.5 million, a significant increase from the €23.5 million he received in 2022. While his fixed salary remained unchanged at €2 million, his variable pay decreased by €1.4 million to €11.5 million, attributed to factors such as free cash flow targets.

Additionally, Tavares received a €10 million bonus for achieving specific transformation targets at Stellantis, as the company transitions towards electric vehicles, software, and technology. He also obtained €13 million in long-term incentives.

Tavares's escalating compensation has the potential to ignite further political tension, particularly amidst pressure from the Italian government to enhance production within the country. This issue has embroiled Stellantis's chair, John Elkann, in a contentious battle.

While executive compensation in the automotive industry tends to be substantial globally, regional disparities exist. US-based car executives typically command higher salaries, whereas figures are comparatively lower in France and Japan.

Last year's pay figures for Ford CEO Jim Farley and GM CEO Mary Barra stood at $20 million and nearly $29 million, respectively. In comparison, Tavares's earnings totaled €23 million. Notably, the three largest US automakers faced strikes during wage negotiations with the United Auto Workers union, citing discrepancies between executive compensation and worker wages.

The impact of these strikes was evident in Stellantis's profitability, despite achieving record profits of €18.6 billion. The company's margin declined from 13.4 to 12.8 per cent, attributed in part to the labor disputes.

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