Turmoil at Stellantis: CEO Transition Amid Financial Challenges

Former Stellantis CEO Carlos Tavares saw his pay drop 37% before resigning amid disagreements with the board. Stellantis faces declining sales and seeks a new CEO to stabilize its 14 brands and reverse market share declines. Tavares will receive bonus and severance pay as the company eyes future challenges.

Carlos Tavares, the former chief executive officer of Stellantis, experienced a 37% reduction in his total compensation last year, falling to 23 million euros before stepping down unexpectedly in December. Tavares had clashed with the board of the Chrysler and Fiat owner over his focus on cost-cutting measures, contrasting with broader company objectives. His bold pricing decisions contributed to a downturn in U.S. sales, an issue the automaker is still struggling to rectify.

The company disclosed in a regulatory filing on Thursday that Tavares would receive an additional 2 million euros in severance and another 10 million euros in bonus pay for achieving various company targets this year. Meanwhile, Stellantis has adopted a cautious forecast for 2025.

As Stellantis chairman John Elkann interviews prospective CEO candidates, determining the future viability of the automaker's 14 brands remains a key concern. Elkann stated that the new CEO would be appointed in the year's first half, noting, "We have excellent candidates, both internally and externally," during Wednesday's financial results announcement.

Stellantis shares have plummeted around 50% in the past year. The new CEO will face challenges of stabilizing a global corporation, reversing declines in U.S. and European markets, contending with strong Chinese competitors, and managing trade policies influenced by former President Donald Trump.

The Franco-Italian-U.S. automaker is also striving to mend strained relationships with dealers, unions, suppliers, and shareholders by recruiting new executives and fostering open communication with stakeholders. Before Tavares' resigned, his pay increased by 56% in 2023 to a total of 36.49 million euros, a package previously contested by shareholders.

Stellantis revealed that its employees earned an average salary of around 66,000 euros in 2024—6% less than in 2023. Tavares' compensation was 350 times that of the average employee. ($1 = 0.9619 euros)

(With inputs from agencies.)