Shareholders of the maker of Jeep SUVs, Ram pickup trucks and other vehicles overwhelmingly approved the remuneration for Stellantis NV CEO Carlos Tavares during its annual general meeting on Thursday.
Shareholders expressed their support for Tavares’ compensation with 80.44% voting in favor of it, spokesman Fernão Silveira confirmed to The Detroit News. The approval was a reverse of last year’s advisory vote when a majority of shareholders expressed disapproval of the CEO’s compensation.
Tavares’ total compensation package for 2022, which includes long-term compensation, rose 22% year-over-year to $24.8 million (23.5 million euro). Stellantis said his cash and vested equity awards totaled $15.8 million (14.9 million euro), a 13% decrease.
At last year’s meeting, 52% of Stellantis shareholders withheld their support for the remuneration of the automaker’s executives, after some, including the French government amid an election, questioned the amount being paid to Tavares. The advisory vote was meant to provide guidance for the company’s board of directors and didn’t directly affect the compensation of executives, though in response, the board held two engagement rounds with institutional investors.
Based on that feedback, the 2022 remuneration report included more disclosures on performance targets and compensation such as specifically stating Tavares’ direct compensation. Shareholders on Thursday also approved an amendment to the remuneration policy that provides for equity awards under the company’s long-term incentive plan to consist only of performance shares.
Stellantis chairman John Elkann emphasized during the meeting the “meritocratic” culture of the company that encourages financial and environmental, social and corporate governance goals.
“The objective of the remuneration policy,” he said, “is to provide a compensation structure that allows Stellantis to attract and retain the most highly qualified executives and colleagues and motivate them to achieve business and financial goals that create value for all of you, our shareholders, and all of our stakeholders in a manner consistent with what we believe is our purpose and our values.”
Two proxy advisory firms were split on whether to support the advisory remuneration vote, Reuters reported earlier this month.
European automotive CEOs traditionally receive smaller compensation packages than their American counterparts. Ford Motor Co. CEO Jim Farley’s 2022 compensation package, however, was $21 million, down 8% from what he pocketed the year prior as the Dearborn automaker reported a $2 billion loss.
General Motors Co. CEO Mary Barra typically is the highest paid of Detroit’s automakers. Her 2022 package is expected to be shared this month. In 2021, she received $29.1 million.
Stellantis’ 13% adjusted operating income margin met its double-digit expectations for 2022. In February, it reported a 26% year-over-year increase in net income to $17.9 billion, the most of the Detroit Three. It benefited from cost-cutting efforts and strong pricing because of low dealership inventories resulting from a global semiconductor shortage. It estimated cost savings from the 2021 merger between Fiat Chrysler Automobiles NV and the PSA Group that created Stellantis achieved a net cash benefit of $7.6 billion for the year.
The remuneration of Tavares, 64, is about 365 times as much as the company’s average employee compensation of about $67,900. Eligible employees represented by the United Auto Workers received $14,760 in profit-sharing checks for 2022’s results, a piece of the $2.13 billion in performance-based benefits distributed globally.
A separate advisory vote concerned $54 million in compensation to former FCA CEO Mike Manley, who left his role overseeing Stellantis’ operations in North and South America to become the CEO of auto retailer AutoNation Inc. in 2021. The payout was based on an agreement between him and FCA prior to the merger that allowed accelerated vesting of stock awards and a severance because he no longer would be CEO. That vote received 51.85% support, Silveira said.
The annual general meeting was the first held in-person in Amsterdam, where Stellantis is domiciled, since its merger because of the COVID-19 pandemic. It featured a somewhat tense exchange around the automaker’s sustainability goals with one shareholder emphasizing its commitment to reduce carbon emissions by 50% from 2021 levels should include “scope three,” which covers emissions from assets over which the automaker doesn’t have direct control like its suppliers. Stellantis has made a net-zero carbon goal for 2038, which includes all three scopes.
“It is very clear that we need to encourage the supply chain to follow us at the same speed at the same time,” Tavares said in response to the question. “We cannot commit on things we cannot control.”
Tavares’ presentation overviewing the company’s results from 2022 and progress toward its Dare Forward 2030 goals continued to assert its push to have half of its U.S. sales be all-electric by 2030. The U.S. Environmental Protection Agency on Wednesday proposed new standards for model years 2027 to 2032 that could accelerate EV penetration to as high as 60% by 2030.
Shareholders also approved a new non-executive director appointment to the board for a two-year term. Benoît Ribadeau-Dumas is a partner at Exor NV, the holding company of Fiat’s founding Agnelli family, and former chief of staff to France’s prime minister.
Shareholders also confirmed a $4.5 billion ordinary dividend to those of record on April 24 that will be paid on May 4.
bnoble@detroitnews.com
Twitter: @BreanaCNoble