Copyright © BusinessAMBE 2023

Shareholders of Stellantis, the French-Italian auto group that umbrella Peugeot, Citroën, Opel and Fiat, among others, have approved the annual compensation of CEO Carlos Tavares. The 65-year-old Portuguese gets the prospect of 36.5 million euros in compensation for the 2023 fiscal year.

The approval brings back a familiar debate in France: should CEOs be compensated as generously as top athletes or actors, or should the pay tension with their ordinary employees not be too great?

In the news: Stellantis' general assembly on Tuesday already approved CEO Tavares' compensation with 70 percent of the votes. The approval is symbolic, as it is not strictly legal.

  • The compensation, which is largely performance-based, could reach 36.5 million euros for 2023, which is 56 percent more than the 23.5 million euros for 2022.
  • The sharp increase is mainly due to a 10 million euro bonus linked to the transformation process following the 2021 merger of PSA (Peugeot-Citroën) and Fiat-Chrysler into Stellantis.
  • The amount is not quite final yet, as it includes pension bonuses that will only be awarded if the targets set for 2025 are reached.

The issue: In France, there is a great deal of criticism from the left about the annual salary, which is considered excessive.

  • The CGT union calls it "a shocking amount, virtually equivalent to 100,000 euros a day" and points out that ordinary staff have only received a 3.7 percent pay increase, compared to the 56 percent for the big boss.
  • The vote of the general meeting shows that a significant portion of shareholders, nearly 30 percent, also questioned it. Among others, the well-known consulting firms Institutional Shareholder Services and Glass Lewis have their reservations.

Contract

What he himself says: On the margins of a factory visit, Tavares pointed out the "contractual dimension" between the company and himself, "just like a soccer player or a Formula One driver."

  • His main point is that his compensation is 90 percent performance-related. So his pay reflects Stellantis' strong performance against the competition.
  • But he says he is also aware of the "social dimension" and made a remarkable promise: "If you think this is not acceptable, make a law and I will respect it."

Wage tension

The reaction: Then the chairman of the (relatively small) Socialist group in the French Parliament, Boris Vallaud, announced his intention to introduce a bill to limit wage tension in companies. According to his calculations, the top wage at Stellantis is 518 times the average wage. The Socialists want the top wage to be at most 20 times the average wage.

© The Content Exchange, source News