Rapido presto! In one hour and 25 minutes on Tuesday, April 16, John Elkann, the president of the Stellantis group, conducted the annual general meeting of shareholders, which approved the accounts for the year 2023. A 99.99% majority of shareholders supported the dividend policy of the automaker, which generated extraordinary profits in 2023, topping the CAC 40, between Total and LVMH. Of this net income of €18.6 billion, €7.7 billion was redistributed to them in the form of dividends or share buybacks.
As if it were only a formality, in a sullen voice, Elkann, grandson of Gianni Agnelli and dressed in a surprising orange vest under his classic gray suit, also put to the vote the executive salary for the year 2023: €4.8 million for himself and €36.5 million (including deferred items) for Carlos Tavares, a quite extraordinary amount for a CAC 40 chief executive. Just a few seconds of suspense and the verdict was in: 70% positive votes.
The result was by no means a foregone conclusion. The three major firms specializing in advising shareholders – ISS, Glass Lewis and its French affiliate Proxinvest – had recommended voting against this compensation. They had several arguments: the salary was too high by European standards (6.77 times the median salary of his peers, according to ISS); the gap with Stellantis's average salary was too wide (518 times more, the average being €70,404); the benefits were excessive (deferred retirement for Tavares and assumption of part of his tax liability, private plane trips for John Elkann); and there was a risk that it would be unacceptable in light of current downsizing plans, notably in the United States and Italy.
Shareholders, on the other hand, preferred to praise the financial performance of the top pair unambiguously. "If Carlos Tavares had been head of Volkswagen, Ford, General Motors or Renault, he wouldn't have received the bonus portion of his earnings, as their operating margin is less than 10%," a group spokesperson pointed out. At Stellantis, it stands at 12.8%, the same as at Mercedes and better than at Tesla by the end of 2023.
For Tavares, nothing is more important than this margin, which is why he is cutting costs to the point of exhausting certain employees. He sees it as an insurance policy for the future, a way of outlasting competitors – including Chinese ones – in the event of a price war, and a way of investing. It has also helped double the group's value on the stock market.
Visiting the town of Trémery in eastern France on the eve of the annual general meeting, he demonstrated his method. He summed up the debate on his salary in just a few sentences: "First of all, it's a legal question: Either it's approved by the shareholders, or it isn't, and we'll look at ways of changing it." In his view, it's "a contractual matter between the company and [him], like for a football player or a Formula 1 driver." And he pointed out that "90% of [his] salary is made up of the company's results (...), so that proves that [they] are apparently not too bad." To close the debate, he asserted, "If you think it's not acceptable, make a law and I'll respect it." It's a statement that the political left wants to take at its word.
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