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three consulting firms recommend that shareholders vote against Carlos Tavares’ compensation

three consulting firms recommend that shareholders vote against Carlos Tavares’ compensation

ISS, Proxinvest and Glass Lewis, three of the firms most listened to by investment funds before voting at the general meeting (AG), highlight the remuneration of Carlos Tavares, the general director of Stellantis.

ISS (for International Shareholder Services) sent its recommendations to the shareholders of the automobile group on March 25 for the AGM of April 16 during which they will have to approve – or not – the remuneration of Mr. Tavares for the year 2023 Experts recommend voting against, while recognizing the company’s transparency efforts, the listening it demonstrates and its very good results. “The remuneration is excessive even in this context”, concludes the ISS, in the note that The world one consulted. An “excess” which does not only concern Carlos Tavares, general director. ISS also singles out the advantages granted to John Elkann, the president of the group, in particular the use of a private plane.

According to the Stellantis reference document, published on February 23, Carlos Tavares’ remuneration for 2023 amounts to 36.5 million euros, including deferred items, compared to 23.5 million euros in 2022. ISS, with a methodology that it applies to all companies, estimates it rather at 42 million euros for 2023, after 17.5 million in 2022. But beyond these figures which we struggle to grasp so much they are high, the firm mainly gives relative indications. In 2022, this remuneration represented 0.10% of the group’s net profit and in 2023, 0.23%. Stellantis has the second highest result in the CAC 40, after that of Total.

ISS also compares Mr. Tavares’ salary with that of managers of large groups such as Mercedes Benz, Volkswagen, Renault or Volvo, but also Airbus, ArcelorMittal, Siemens, Thales, Thyssenkrupp, or even the oil companies Total and Eni. ISS estimates that the Stellantis boss earns 6.77 times more than the median salary of his peers.

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The benefits of President John Elkann also highlighted

This amount of 42 million, therefore writes ISS, “seems excessive compared to pairs selected by ISS and European standards and is considered high even compared to American pairs selected by the company itself”. Stellantis prefers, in fact, to compare the salary of its general director to that of leaders of groups like Ford, General Motors or Exxon, more than half of the manufacturer’s profits being made in the United States.

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The ISS firm also points out “the generosity of the benefits granted to the executive chairman (personal use of an aircraft) and to the general director (tax equalization and pension contributions of 1.9 million euros)”. Carlos Tavares in fact receives more than 600,000 euros to fiscally compensate for the fact that he is an employee in France and the Netherlands, but the Stellantis annual report does not detail this point further. As for John Elkann, his transport expenses reach 430,760 euros, according to the Stellantis annual report and his total remuneration 4.8 million euros. He is the grandson of Giovanni Agnelli, himself the grandson of the founder of Fiat. The Agnelli holding company, Exor, owns 14.2% of Stellantis, ahead of the Peugeot family (7%) and the French State via Bpifrance (6%). ISS notes, in passing, that if John Elkann is the titular president, it is Henri de Castries, senior administrator, who actually occupies this role on the board of directors.

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Mattie B. Jiménez

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