Stellantis CEO Tavares' pay sparks anger ahead of French election

PARIS -- Stellantis CEO Carlos Tavares' 2021 pay drew an angry response from some trade unions on Wednesday, days ahead of a French presidential vote fought largely over cost-of-living concerns.

Minority Stellantis shareholder Phitrust estimated the value of the total compensation package awarded last year to Tavares at 66 million euros ($71 million) ahead of the automaker's group’s first annual general meeting.

The group's chairman, John Elkann, said Stellantis would take into account the shareholder vote, which he described as a recommendation, even though the executive remuneration report for senior managers, including Tavares, was opposed by more than 52 percent during Wednesday's meeting.

The vote however will not affect planned compensations for last year, based on Netherlands law, where Stellantis is based.

"Today's vote on remunerations is only consultative, so the remuneration report for 2021 will be implemented," a source close to the matter told Reuters.

"It is our conviction as a board that in a meritocracy, rewarding on the basis of performance criteria is a fundamental element of our policy," Elkann told shareholders. "We will take on this vote which is, again, a recommendation".

Phitrust, which issued a news release to say it had voted against approving the package, said Tavares' 2021 pay of about 19 million euros would add to a stock package worth an additional 32 million euros and long-term compensation of roughly 25 million euros.

A Stellantis spokesperson disputed the 66-million-euro figure put forward by Phitrust as "false".

"The real compensation for 2021 is around 19 million euros. The remainder are hypothetical elements for the long-term, until 2028," added the spokesperson for Stellantis. The automaker, which includes the Jeep, Ram, Opel and Maserati brands, was formed in January 2021 by the merger of PSA Group, where Tavares was CEO, and Fiat Chrysler Automobiles.

Gabriel Attal, the spokesman for the French government, which holds 6.15 percent of Stellantis through state-owned bank BPIFrance, told a press briefing the figures were not "normal" and showed there was a need for more regulation at the European level. BPIFrance was among those that voted against the pay package.

Jean-Pierre Mercier, a union representative for the hard-left CGT union, called the package "indecent and revolting," while CFDT representative Christine Virassamy urged politicians to take urgent measures to cap executive salaries.

President Emmanuel Macron, a pro-European economic liberal, and far-right nationalist challenger Marine Le Pen have qualified for what promises to be a tightly fought presidential election runoff on April 24.

"These situations contribute and, unfortunately, lead to citizens taking up extreme positions during elections," Virassamy said in a statement.

Stellantis had in February reported a 2021 net profit that close to tripled year on year to 13.4 billion euros. It voted Wednesday to pay out  3.3 billion euros in dividends.

The group's largest trade unions did not immediately comment on Tavares' pay package.

Tavares' 2021 compensation is expected to make him the highest-paid automotive CEO in Europe. Volkswagen Group CEO Herbert Diess earned just under 8 million euros in 2020. 

In the U.S., GM CEO Mary Barra earned $23.7 million in 2020 (about 21.9 million euros at current exchange rates).

Automotive News Europe has calculated that if Tavares achieved all the targets of his compensation incentives and plans, he would be entitled to receive more than 220 million euros by 2026.

Former Renault Group CEO Carlos Ghosn also faced criticism over his pay from the French government.

Ghosn was simultaneously chief executive of both Renault and alliance partner Nissan for a number of years, and drew a multimillion-dollar compensation package from both automakers. 

It was reportedly the prospect of reduction in pay from Nissan that led to Ghosn’s alleged involvement in what Japanese prosecutors say was an effort to hide millions more in compensation. 

Ghosn has denied the allegations since his arrest in 2018, and he remains in Lebanon after fleeing there at the end of 2019 rather than face trial in Japan. 

Reuters contributed to this report