The automotive world is closely examining the details of former Stellantis CEO Carlos Tavares’ compensation for 2024, which totaled approximately $24 million (23 million euro). This figure, revealed in Stellantis NV’s annual report released on Thursday, comes in the wake of a challenging year for the automaker, marked by sales declines and other operational headwinds that preceded Tavares’ departure in early December. Alongside his substantial annual pay, Carlos Tavares is also receiving a separation package valued at $12.5 million (12 million euro), further comprising company shares, as part of his exit agreement.
This settlement encompasses both a legally mandated severance payment under Dutch law and a 10 million-euro performance incentive slated for disbursement this year. Carlos Tavares had been at the helm of Stellantis since its inception in 2021, following the merger of Fiat Chrysler Automobiles NV and Groupe PSA. His exit was prompted by a confluence of factors, notably sluggish sales figures and operational difficulties throughout the past year, which led to increasing discontent among key stakeholders, including dealerships and labor unions. Significantly, Stellantis experienced a sharp 70% drop in net profits in 2024, with North American operations particularly impacted by a shrinking market share and an 80% decrease in adjusted operating income. The company has announced its intention to name a successor CEO within the first half of the current year.
Carlos Tavares, former CEO of Stellantis, received a significant pay package and severance in 2024 despite company challenges.
The repercussions of Stellantis’ underwhelming 2024 financial performance are also being felt by its workforce. Over 38,000 Stellantis employees represented by the United Auto Workers (UAW) union will see considerably reduced profit-sharing bonuses this year, averaging around $3,780 per worker. This is a stark contrast to the previous year’s bonus of $13,860, which was awarded following Stellantis’ record-breaking profits in 2023.
While Carlos Tavares’ 2024 pay package is notably less than the over $39 million (36.5 million euro) he received in 2023 – a compensation that positioned him as the highest-paid executive among traditional automakers and drew criticism from UAW leadership and members amidst job cuts and cost-saving measures – the severance payments largely bridge this gap. In comparison to his 2022 total compensation, Tavares’ 2024 earnings are relatively consistent. The 2024 package included approximately 2 million euro in base salary, over 20 million euro in long-term incentives, and 500,000 euro categorized as “post retirement benefit expense.”
The annual report further highlights the disparity between executive and employee compensation, revealing that Carlos Tavares’ pay was roughly 350 times greater than the average Stellantis employee’s compensation of $68,644 (65,993 euro) in the past year. This ratio is down from 518 times in 2023. Industry observers are now waiting for Ford Motor Co. and General Motors Co. to release their executive compensation reports in the coming weeks, providing further context to the broader landscape of automotive executive pay.
Executive compensation for Carlos Tavares in 2024 reflects industry trends and company performance.
In conclusion, Carlos Tavares’ 2024 compensation package and severance agreement underscore the significant financial rewards for top executives in the automotive industry, even during periods of company-wide challenges and fluctuating performance metrics. As Stellantis transitions to new leadership, the financial outcomes of 2024 and the details of executive pay will likely remain a point of interest for stakeholders, employees, and industry analysts alike.
