Stellantis had a turbulent annual meeting yesterday

2024 was disappointing for the Stellantis Group, President John Elkann told the annual shareholders meeting in Amsterdam on Tuesday, adding that a new CEO to replace Carlos Tavares, who quit in December, will be named by the middle of this year. The remuneration of the former CEO for 2024 also caused some turmoil.

“I would like to start by saying that 2024 was not a good year for Stellantis,” said the world’s fourth-biggest carmaker president. “The reasons were partly our responsibility, which made the result even more disappointing”. Elkann added: “Rest assured that everyone at Stellantis will do everything in their power to make it stronger in extreme circumstances.”

U.S. and European car industry threatened

“Rigid rules on carmaking and the Green transition are threatening US and European carmaking,” Stellantis President John Elkann told the annual general meeting, while stressing that the Italo-Franco-American carmaker had been “encouraged” by US President Donald Trump’s Monday night statement that he was considering pausing his 25% tariffs on auto parts and vehicles.

“With the current path of painful tariffs and overly rigid regulations, the American and European automotive industry is at risk”, Elkann said, opening the shareholders’ meeting.

“It would be a tragedy because the automotive industry is a source of jobs, innovation, and strong communities. However, it is not too late for the United States and Europe to take the urgent actions needed to promote an orderly transition. We are encouraged by what President Trump indicated yesterday on tariffs for the automotive industry,” he added.

Fierce opposition about Tavares’ ‘golden handshake’

One-third (33.07%) of the Stellantis shareholders voted against the Remuneration Committee’s report regarding the remuneration for 2024 and the departing fee of former CEO Carlos Tavares, who suddenly left the company in December last year while his (last) term was planned to end in the first half of 2026.

In 2023,  when everything was still going very well for Stellantis, the CEO got a remuneration of (in all) €36.5 million, and already that year, there were serious critics about the height of the payment. Even French President Emmanuel Macron commented on the excessive height at the time.

For 2024, the year of its departure, Tavares now gets €23.1 million regarding his job for 2024, a €2 million departure fee, and an additional €10 million bonus. The latter bonus was given because “a significant step in the company’s transformation has been reached.”

Record profits marked the first Stellantis years, but 2024 saw a steep fall (-70%) to €5.5 billion, obliging the once-acclaimed CEO to leave the company earlier than expected.

The unions have already deemed the departure payments indecent, and a smaller shareholder, Allianz Global Investors, declared to the French  newspaper Le Monde  that Tavares’s remuneration was excessive “considering the mediocre operational achievements and the reasons why he had to leave the company immediately.”

The shareholders only have a consultative vote on the matter. They will also have to vote on Stellantis’ future remuneration policy. The group has been in the news several times concerning its ‘exaggerated remuneration program’.

The American way

According to Proxinvest, a French society that advises investors, this remuneration policy is a legacy of the American system of paying top managers, where the gap between the salaries of those top guys and the average worker is gigantic.

The director of Proxinvest questions, “This is undoubtedly a way to attract top CEOs from abroad, but wouldn’t it be possible to hire a good leader without paying such stupendous salaries?” This question is acute at a moment when Carlos Tavares’s actual predecessor still has to be assigned.