Stellantis CEO Carlos Tavares earned 19 million euros in 2021, according to Stellantis' annual report, leaving him poised to be the highest paid automotive executive in Europe for the period.
In addition, Tavares could remain at the top of that prestigious list because Stellantis has granted him a cash and stock compensation package worth roughly 220 million euros ($244 million) over five years.
Let's look at 2021 first, keeping in mind that Stellantis, which posted record results and provided a very positive forecast for 2022, is the first European automaker to publish its full annual report.
At 19 million euros, Tavares total compensation would be well ahead of what Volkswagen Group CEO Herbert Diess earned in 2020 -- just shy of 8 million euros -- as well as BMW Group chief Oliver Zipse's 5.3 million euros and Mercedes-Benz boss Ola Källenius' 5.9 million euros.
Renault CEO Luca de Meo earned 2.5 million euros in the second half of 2020, equivalent to 5 million euros over a full year.
To find a closer rival to Tavares' compensation you have to look across the Atlantic, where General Motors CEO Mary Barra earned $23.7 million (roughly 21.9 million euros at the current exchange rate).
What Tavares earned last year was more than double the 7.6 million he received as head of PSA Group in 2019.
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His 2020 compensation is unknown. PSA did not publish a 2020 annual report because it merged with Fiat Chrysler Automobiles on January 17, 2021, creating Stellantis.
Tavares is also due to have big paydays in the future, based on Automotive News Europe's calculations of his five-year package, which combines five different elements that effect his remuneration, according to company documents.
- An annual base salary of 2 million euros.
- An annual short-term incentive of up to 8 million euros (this provided Tavares 7.5 million euros in 2021).
- A long-term incentive on a rolling three-year basis. The 2021-23 plan provides for a maximum bonus of about 24 million euros, to be paid in 2024. Similar plans will follow in the coming years.
- A so-called "one-time transformation incentive" that rewards Tavares 50 million euros in cash if by December 31, 2025, he the turns Stellantis "into a global mobility company, with emphasis on vehicle electrification and software." To get the maximum payout Tavares needs to achieve seven "innovative milestones." There was no information on what these milestones are in Stellantis' report.
- A final perk hinges on Stellantis' share performance. If the stock's value increases by at least 80 percent from the base price of roughly 12.19 euros on the date of the merger for at least 60 trading days by December 31, 2025, he gets 1 million shares. If the share prices increase by 100 percent under the same conditions, he gets 2 million shares, which would have an estimated value of at least 48.75 million euros.
If Tavares achieved all the targets of the various plans, he would be entitled to receive more than 220 million euros by 2026.
One has to wonder how these numbers will be viewed in France, where the government holds a 6 percent stake in Stellantis.
French politicians have been high critical of such big payouts to CEOs. In 2016, the government, which also has a large stake in Renault, voted against the compensation package of then CEO Carlos Ghosn. The economy minister at that time was current French President Emmanuel Macron. After the Renault board disregarded the government's opposition to the payment, Paris passed a new rule that makes giving large payouts to CEOs even tougher in the country.
Stellantis will not have to worry as much about this possible roadblock since it's officially a Dutch company.
Looking at the payouts for some other top Stellantis executives, CFO Richard Palmer received 14.8 million euros, of which 14.6 million euros were a so-called "retention benefit" to compensate for incentives he lost when he was excluded from the Stellantis board when it was formed last year.
Chairman John Elkann was paid 7.9 million euros in 2021.
The automaker's top paid executive in 2021 was someone who has never worked a day at the company: Sergio Marchionne.
Stellantis paid 26 million euros to the estate of the former FCA boss, who died in 2018.
