PARIS -- PSA CEO Carlos Tavares could earn an additional 1 million euros ($1.2 million) in compensation for helping to engineer Opel's turnaround plan in 2017.
Shareholders will vote on the bonus at PSA's annual meeting on April 24. PSA's chief financial officer, Jean-Baptiste de Chatillon, is eligible for a 500,000-euro bonus.
In awarding the bonuses, PSA's supervisory board cited the two executive's "decisive contribution to the achievement of an exceptional event of importance to Groupe PSA during that period, namely the development of the PACE recovery plan for Opel-Vauxhall in only 100 days."
PSA acquired the Opel and Vauxhall brands from General Motors for 1.3 billion euros in cash last year. The sale closed on July 31, 2017, and Tavares promised that within 100 days the German automaker would present a financial recovery plan. Under GM, Opel had lost about 1 billion euros a year since 1999.
Opel CEO Michael Lohscheller and Tavares presented the PACE plan last November. The goal is for Opel to generate positive operating free cash flow and a 2 percent automotive operating margin by 2020. Among its components: lower Opel's break-even point to 800,000 cars, find synergies worth 1.1 billion euros by 2020, cut costs by 700 euros per car, improve Opel pricing and reduce sales in less-profitable channels.
Tavares and de Chatillon can receive additional bonuses tied to Opel's performance in the next three financial years, under the "exceptional compensation" plan approved by the supervisory board. The board wished to give them "an incentive to make the PACE recovery plan succeed," according to PSA's 2017 registration document.
Opel's losses were cut to 257 million euros in 2016 under Karl-Thomas Neumann, the CEO at the time. Neumann was replaced by Lohscheller in June. PSA reporting operating losses at Opel of 179 million euros in the last five months of 2017.
Shareholders will vote on a pay package worth 6.7 million euros for Tavares, an increase of 2 million euros over 2016. His fixed compensation remains the same, at 1.3 million euros. In addition to the Opel bonus, Tavares was awarded 130,000 shares with a value of 2 million euros. He received the same number of shares in 2016, but the value of those shares was 1.4 million euros. The remainder of his compensation was made up of performance bonuses.
De Chatillon is eligible to receive compensation of 2.8 million euros, compared with 2 million euros in 2016. Other top executives receiving a raise are Maxime Picat, chairman of the Europe region, who will receive 2.3 million euros in 2017 compared with 900,000 euros in 2016, and Jean-Christoph Quemard, chairman of the Middle East and Africa region, who will receive 2.4 million euros compared with 2 million in 2016.
Even with the raise, Tavares, who oversees five brands, will earn less than many automotive CEOs. Carlos Ghosn of Renault Group received 7 million euros in 2016, Matthias Mueller of Volkswagen Group received 10 million euros in 2017, Harald Krueger of BMW Group received 7.6 million euros in 2016 and Dieter Zetsche of Daimler 13 million euros in 2017. Jim Hackett of Ford Motor received compensation worth about $17 million (14 million euros) in 2017, Mary Barra of General Motors received nearly $23 million (19 million euros) in 2016 and Sergio Marchionne of Fiat Chrysler Automobiles $12 million (9.8 million euros) in 2017. In comparison, Toyota Motor president Akio Toyoda received about $3 million (2.45 million euros) in 2016.