Stellantis shareholders have made their voices heard in a recent nonbinding vote on the pay policy for the company. This comes after French officials called out CEO Carlos Tavares’s excessive salary, as announced in an annual report.
What happened with Carlos Tavares, and how did one man’s pay lead to shareholders scrutinizing the entire executive pay package plan for Stellantis? Find out more about the situation below.
Who is Stellantis?
Stellantis is a multinational automaker established in 2021 because of a Fiat Chrysler and PSA Group merger. It’s the parent company behind popular vehicles like the Jeep Wrangler, Ram 1500, Dodge Challenger, and more.
The company’s global sales success has made it the world’s 5th largest automaker with a presence and positive reception reaching over 100 countries. But not everything you hear in the news about Stellantis is positive right now.
CEO Carlos Tavares has created controversy for the company after its annual report was released showing his pay.
What Happened with Carlos Tavares?
Despite the success Stellantis has had in the last year, some have expressed concern about some of the company’s financial decisions. One such decision was to pay CEO Carlos Tavares a salary of over $20 million for the year – without long-term incentive pay.
Upon finding this out, a spokesman for the French government called the pay abnormal. Investor Phitrust SA also criticized Tarares’s salary because the company will likely have massive restructuring and job cuts due to production overcapacity and merger issues.
If the issue were just with one person’s pay, it would be more easily resolved. Instead, Stellantis is making headlines again because of its compensation plan for the upcoming year.
Shareholders’ Response to the Company Payment Package
Stellantis discussed the new pay package for executives like board members and the CEO in a recent meeting with shareholders. Shareholders have expressed their displeasure with that plan by voting to reject it entirely.
The nonbinding vote ended with just over 50% of shareholders opposing the company’s pay plan. John Elkann, the company chairman, said they would take the vote’s results into account for finalizing plans.
Unfortunately for the shareholders, the vote doesn’t affect the compensation plan created by Stellantis. It does, however, say a lot about what they think of the company’s financial decisions and could influence the company toward an outcome more favorable to the shareholders.
In fact, Stellantis clarified that taking the vote into account would be reflected in the company’s report next year. The question is: will that be enough to appease the dissatisfied shareholders?
Is this pay plan issue with shareholders a sign that Stellantis may not be as successful as they’ve been this past year? What effect will this have on the company’s ability to make beloved vehicles like the Ram 1500 and Dodge Challenger? There’s no way to tell at this time.
The company is currently doing very well for consumers and its employees. Only time will tell how the changes it’s making now will turn out in the future.
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