The Stellantis Group has just published its annual financial report for 2023. Tavares’ compensation includes the one-off bonus for achieving the goals set in 2021. Although they appear high in an absolute sense, the CEO’s earnings are not particularly high if compared with the compensation of the top managers of the largest multinationals, especially in relation to the results that matter for shareholders
The CEO is the most important manager of a modern company, especially if it has the size and operational scope of a multinational. More than the president, since it is up to the CEO (Chief executive officer) develop and put into practice the strategies that will satisfy the objectives of the shareholders who control the company. It is therefore logical that his compensation is adequate for his responsibilities and results. The larger the company, the greater the responsibilities; the better the results, the higher the profit. Carlos Tavares he is number 1 in the group Stellantis and in 2023, as stated in the newly published annual financial report, he received a gross remuneration of approximately 23.5 million eurosslightly lower than that of 2022. Figures that include salary, bonuses and short- and long-term incentives (the latter are a one-off payment). If other specific objectives are achieved by 2025 (when Tavares’ contract expires, but this compensation is included in the 2023 budget), the Portuguese manager will receive an additional bonus in shares which will bring his remuneration to a total of approximately 36.5 million. All these compensations are subject to approval at the shareholders’ meeting which will be held on April 16th. Including the last possible bonus, Tavares’ average remuneration over the last five years would amount to just under 20.5 million euros.
Carlos tavares: the salary
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Is 23 or 36 million a lot in one year? It depends on the point of view. For someone who earns 1,300 euros a month, it is enormous. For those who earn over a billion dollars a year, like some of the most important executives of the main global investment funds, they seem like a trifle. Which in turn pale in comparison to the total assets of Jeff Bezos, owner of Amazon, valued at around 180 billion dollars. To understand better, it is therefore necessary to break down the numbers. The basic salary of Tavares in 2023 was two million of exactly euros, unchanged compared to 2022. The annual bonus amounts to 5,786,800 euros (in 2022 it was 7,480,000); then add 3,738,229 euros long-term incentives paid in shares (3,073,489 in 2022) and 1,946,700 of pension contribution (2,370,000 the previous year). The total is 13,471,729 euros. It adds up to that a prize of ten million (paid in shares) as a “transformation incentive”: recognition for having achieved objectives of technological evolution and reduction of the company’s carbon impact. Total: 23,471,729 euros. If the further objectives linked to carbon neutrality, digitalisation and the value of the stock are achieved by 2025, the remuneration will be enriched with shares which will bring the total compensation, as mentioned above, to 36,494,025 euros.
stellantis results
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As an immediate point of reference, in 2022 the CEO of General Motors Mary Barra received total compensation of approximately $29 million, while Ford’s CEO, Jim Farley, he received around 21. Tavares earned 24.8 million dollars in 2022, equal to around 23.5 million euros. We were talking about the objectives for the shareholders, i.e. the managers’ employers: Stellantis recorded revenues of 189.5 billion euros in 2023, 6% more than in 2022. Net profit was 18.625 billion, the 11th % more. The dividend that will be distributed, 1.55 euros per share, is 16% higher than in 2022.
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