In an unprecedented leap from the previous year, Stellantis CEO Carlos Tavares is set to receive a staggering €36.5 million in total compensation for 2023 – an increase of 56% compared to 2022. This significant rise is attributed to strong financial performance under Tavares’ leadership at the automobile manufacturing giant.

With the new peak, Tavares’ remuneration lies 518 times higher than the average paycheck (70,404 euros) cashed by the workforce at Stellantis. However, the total package for the boss encompasses more than a base salary and includes other incentives tied to company success metrics. These can make a significant difference in the US.

Approval pending

The surge is notably attributed to a €10 million bonus related to the ‘transformation’ initiative launched by the group in 2021, as outlined by Stellantis in their financial summary, which entails a successful electrification strategy. On Thursday, the auto group announced an unprecedented profit of €18.6 billion for 2023, marking an 11% increase from the previous year.

While his base salary remains at €2 million, his performance bonus for 2023 has seen a minor reduction to €11.4 million due to a slight decline in the group’s operating margin. Additionally, he will gain approximately €13 million in share-based bonuses tied to his long-term goals. Tavares’ remuneration package is yet to be approved by the shareholders at the annual general meeting in mid-April.

 €1.9 billion for workforce

Tavares isn’t the only one benefitting from the positive results. The fourth-largest car manufacturer globally declared it would distribute nearly €1.9 billion from its profits to its global workforce.

About €7.7 billion is reserved for shareholders through dividends and a share repurchase scheme. At the same time, the group’s workforce has shrunk by 12% to 242,000 employees worldwide or 30,000 fewer in one year.

When the American Union went on strike a few months ago, the excessive payment checks of automotive execs were one of the thorns causing upheaval among factory workers. Also, American CEOs in the automotive industry earn considerably more than their colleagues in Japan and Europe.

Figures from 2022 unveiled that Akio Toyoda earned €6.1 million, while Oliver Zipse at BMW reaped €4.8 million, and Ola Källenius at Mercedes received €6.5 million.

‘Excessive’

Tavares ranks among the world’s best-paid CEOs, which triggered French President Emanuel Macron’s disapproval last year. He called the payment check of the Stellantis CEO – then half lower – “chocking” and “excessive”, demanding a cap for these types of earnings.

However, CEO pay in the US is much more dependent on bonuses and stock options or directly related to the company’s health than in Europe. With no legal framework limiting the cap of CEO remuneration in the US, nothing is holding Tavares back from earning another record pay next year.