With a clear majority of 70% of votes cast, on Tuesday, April 16, Stellantis's annual general meeting approved the remuneration package for Carlos Tavares, the CEO of the French-Italian-American automaker: €36.5 million for 2023, including deferred items. It's a staggering amount, and one that makes Tavares the highest-paid boss in the global automotive industry.
For his work over the past year, the 65-year-old executive will receive 518 times the average annual salary at Stellantis (€70,404), or the equivalent of 1,586 years' pay for a temporary employee working on the assembly line at one of the group's French plants, an interchangeable operator who earns the minimum wage and does not benefit from any form of profit-sharing scheme offered by the group.
Stellantis shareholders chose to reward the company's remarkable financial performance, whose stock market value has doubled since its creation, in January 2021, through the merger of the Peugeot family's PSA Group and the Agnelli family's Fiat-Chrysler Automobiles. The latter has become accustomed to paying its executives very well, and its governance practices are closer to those of American capitalism than to European customs.
The head of Stellantis, which makes 52% of its sales in the United States, where margins are highest, has never missed an opportunity to compare himself to CEOs on the other side of the Atlantic, rather than to his European peers. He sees his salary as proportionate to Tim Cook's, who is paid $99 million (€93 million) by Apple; or Sundar Pichai, who was paid $226 million in 2022 by Google-Alphabet. This is Europe, however, and the issue of inequality is much more sensitive here.
Worrying double effect
At the top end of the pay scale, Tavares's salary is likely to drive up those of all CEOs. Renault CEO Luca de Meo's pay raise of over €1 million went unnoticed, when compared with Tavares's €13 million increase from 2022 to 2023. Meanwhile, Patrick Pouyanné, the CEO of TotalEnergies, looks like a role model with his salary of around €8 million. Down on the ground, factories continue to struggle to compete with those in other countries and preserve jobs. Their employees are unlikely to see their pay raises outpace the inflation of the past few years. A worrying double effect.
How much is a successful executive worth in a globalized market? Political authorities would love to be able to impose an answer to this question, since the amounts involved seem so extravagant in relation to the frustrations that are mounting within the working population: Salaries that don't pay enough, and career paths that don't ensure social advancement as much as they used to.
In April 2022, aware of the risks of a social explosion, President Emmanuel Macron said the €66 million the board awarded to Tavares between 2022 and 2028 was "shocking and excessive." At the time, Macron had called for the introduction of a ceiling on the abusive remuneration of European executives, at the European Union level. Lacking any consensus and perhaps the will to implement it, the project was never followed through, making the Stellantis CEO's recent remarks almost ironic: "If you think it's not acceptable, make a law and I'll respect it!" This refusal to self-regulate, at a time when we need to stand united to face up to rising perils, is staggering. It is tantamount to a dangerous provocation.