Home » Stellantis CEO Carlos Tavares Earned 518x The Average Employee In 2023

Stellantis CEO Carlos Tavares Earned 518x The Average Employee In 2023

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Will I write about Stellantis CEO Carlos Tavares every day? Maybe. He’s become the most interesting automotive executive to me and, in some ways, the hardest to pin down. He’s a car enthusiast, but also a cold and almost brutally-focused businessman. He’s also been quite successful over the last few years and has been paid handsomely for it.

Is the robo-taxi game done? Is it over? There were huge investments in the past by automakers and what has become of them? We’re going to take a closer look at some Hyundai-Kia investments and how those have panned out.

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You know what’s ended up panning out? Carvana. The company is out with its Q4 earnings and the company probably isn’t going to die anytime soon. Neither will Toyota, though the company’s problems keep compounding.

Happy Friday, y’all, let’s dump.

Carlos Gets $39.5 Million In 2024

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If you read the excellent book “Boundless” (co-written by friend-of-the-site Sean McLain) about Carlos Ghosn, the former boss of Stellantis CEO Carlos Tavares when they were at Nissan-Renault, you learn that Ghosn’s ultimate undoing was a strong desire to get paid.

Ghosn basically told Nissan-Renault “Gimme my check, put some respect on the check.” It didn’t happen quickly enough for Ghosn and Ghosn found some, uh, creative ways to pay himself back which, whether fairly or not, Nissan employees used against him.

Tavares was not content to be in Ghosn’s shadow and, ultimately, told everyone that he was ready to be CEO of a Ford or a GM. This didn’t go over well and, reportedly, Tavares was told to apologize. He didn’t, and instead, Tavares quit the company abruptly. It all worked out for Tavares as he did end up being CEO of an American car company, sort of, in the global behemoth that is Stellantis.

Unlike his former boss, I think it would be hard to argue that Tavares isn’t fairly paid. According to a recent SEC filing, the CEO will be getting just shy of $40 million in total incentives (including retirement, et cetera, not cash). His base salary is only about $2.2 million, but toss in short-term incentives and all that other stuff and it adds up pretty quickly.

Why? Well, the company has been extremely profitable and he, like most execs these days, gets paid back handsomely in stock. The company addresses this in the release:

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Our philosophy, approach and delivery of remuneration is strongly linked to the Company’s performance and interests of our shareholders. All elements of our compensation structure are market-driven with a significant portion (88.9 percent) of overall compensation (base salary, short-term incentive and long-term incentive) subject to performance risk for our CEO. The long-term incentive, Transformation Award and Shareholder Return Award are aligned with the long-term success and sustainability of Stellantis as it competes in a dynamic industry undergoing a significant transformation driven by electrification and software technologies

If it ain’t broke.

Though, as The Detroit Free Press points out, this is a lot more than what the average Stellantis employee makes:

The average employee compensation at Stellantis in 2023 was $76,193.

That’s not bad, but the real money is apparently in welding sheep.

Is The Robo-Taxi Business A Real Business?

Hyundai Motional

The success of Uber and the, uh, whatever you’d call the massive failure of Cruise, does make me question how much of a future there is for the robo-taxi business, at least in the near term. The fun term for this is Mobility-as-a-Service, or MaaS. So far MaaS businesses like robo-taxis (see: Argo) and scooters have done poorly as actual businesses.

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There’s an interesting report out this week from S&P Mobility that talks about Aptiv, the company formerly known as Delphi, which swung hard into MaaS but is starting to reconsider that position. Specifically, Aptiv said it wouldn’t continue supporting its Motional robo-taxi tie-up with Hyundai. Is this a strategic retreat?

Aptiv’s decision was positioned as a strategic maneuver rather than a sign of skepticism toward Level 4 mobility-as-a-service (MaaS) technologies, but it is impossible to fully separate the two sentiments. From this perspective, Aptiv will be reallocating resources to support its impressive near-term growth in advanced driver assistance systems and automated driving of which it is a conventional technology supplier. This shift bolsters the company’s revenues while allowing Aptiv to mitigate the risk associated with continued investment in a technology with uncertain return-on-investment (ROI) timelines.

Yep. The report also notes that Hyundai bought ADAS company 42dot last year and reorganized under 42dot, which is focused more on Level 3 than Level 4:

The influence of startup 42dot will play a larger role within Hyundai’s core business, starting with advancements in electrical/electronic architectures, crucial for the redevelopment of its Level 3 technology. This raises a question — will Motional continue to influence Hyundai’s Level 4 ambitions, or will 42dot take on this responsibility? This does not necessarily signify the end for Motional, as it could potentially be retained as a US subsidiary (given the relatively high prospects for robo-taxis) or as the consumer-facing mobility brand in the US market. However, if Hyundai maintains its Level 4 ambitions, it could lead to a significant shift in the organizational structure and positioning of its product/expertise.

Add this to the list of reasons why I’m skeptical of all these investments in Level 4 right now.

Carvana: We’re Not Dead Yet Mother Truckers

Carvana Vending Machine
Photo credit: Carvana

At the end of 2022, it sure seemed like used car retailer Carvana was not long for this world, so much so that we started daydreaming about how to repurpose its giant car vending machines. In addition to some questionable business practices that led to a statewide ban from operating physical dealerships in Michigan, the company’s rapid growth came at a huge cost and with huge debt burdens.

In what feels like a story of redemption, the company has been reorganized and simplified a bit, and the company actually posted a net income of $450 million in 2023, compared to a loss of $1.59 billion in 2022.

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How’d the company do that?

Per Automotive News:

Carvana said its full-year net income figure was driven by a one-time gain on debt extinguishment of $878 million. Revenue fell 21 percent to $10.77 billion in 2023 as the company traded sales volume growth in favor of improving profitability.

“Carvana is stronger than ever,” CEO Ernie Garcia said in a statement. “We are beginning to demonstrate the differentiated profitability, efficiency and customer experience benefits of our vertically integrated approach, and have a clear path toward our goals of becoming the largest and most profitable automotive retailer and buying and selling millions of cars.”

Well, that debt extinguishment certainly helps a bunch.

Freakin’ Toyota, Man

Toyota16newmodelsakiotoyoda

There was some internal debate over the headline “Toyota and Daihatsu screwed up so, so, so badly” because a lot of these scandals that seem like huge deals in the moment sort of flame out in a few days as everyone gets excited about Sydney Sweeney eating hot wings, or whatever.

I think time has been good to that call as the company now faces scandals on many fronts, most of which seem to involve the pressure Toyota put on its subsidiaries to produce and the ways (cheating) those subsidiaries responded that pressure.

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In addition to widespread shutdowns of Daihatsu plants, Toyota has also had to shut down other plants while the company works with regulators to figure out if its diesel engines are actually in compliance with the law or not.

According to Reuters, Toyota is continuing the shutdown of those plants at least until March, and maybe beyond. Is this over? Are there more subsidiaries with secrets?

There are still more questions than answers.

What I’m Listening To While Writing TMD

True story: I was so excited to get the Beck record “Odelay” in 1996, when I was like 13, that I borrowed my German grandmother’s CD player and insisted on playing it for her. The whole album. My German grandmother, who survived being sent to an ammunition factory as punishment by the Nazis, just sat there quietly while I played the whole Dust Brothers-produced album. All 55 minutes of it, including the secret track you have to wait four minutes for. She didn’t complain. I don’t think she enjoyed it, but she did it, because Gigi loved me. I don’t think “Odeley” is Beck’s best album (that would be “Midnite Vultures”) but it does hold a special place in my heart.

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The Big Question

Is Carlos Tavares worth it?

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The F--kshambolic Cretinoid Harvey Park
The F--kshambolic Cretinoid Harvey Park
1 month ago

> His base salary is only about $2.2 million

One of those words doesn’t belong

Geoff Buchholz
Geoff Buchholz
1 month ago

The discourse here about CEO salaries is one of the great things about this site; the commentariat is by and large passionate but also thoughtful.

And I legitimately think about “Odelay” about once a week. What a great album.

Strangek
Strangek
1 month ago

Sea Change.

Phantom Pedal Syndrome
Phantom Pedal Syndrome
1 month ago

“Is Carlos Tavares worth it?”
I doubt it.

But what do I know.
I know not to talk about my pay with co-workers.
We’re all happy doing what we do until we find out about the inequities.
Nothing changed about the job I agreed to do for the pay that was offered.

Seems like a silly thing to get mad about.

If you think it’s unfair you are free to leave.
Try your skills elsewhere.

Ron888
Ron888
1 month ago

“Carvana said its full-year net income figure was driven by a one-time gain on debt extinguishment of $878 million”
Is this as appocolyptically stupid as it sounds? They claim they made a profit because they stiffed their creditors for an even larger sum??!

“Aptiv’s decision was positioned as a strategic maneuver rather than a sign of skepticism toward Level 4 mobility-as-a-service”
Translation:We’re too proud to admit we’re wrong,so let’s try to say all those billions will somehow magically pay off elsewhere

Andy Individual
Andy Individual
1 month ago

“Is Carlos Tavares worth it?”

No. Only people who throw/kick a ball or chase a puck are worth that kind of coin!

I like Beck’s work, but I have a hard time getting over the whole scientology crap. Interesting that his grandfather was a member of FLUXUS and his mom was an experimental artist. Something going on with that gene pool…

FleetwoodBro
FleetwoodBro
1 month ago

He gets paid too much because it’s the market value for a person to run a publicly traded behemoth of a corporation 24 hours a day and get his ass handed to him every three months. That job sucks and nobody likes you. Nothing you can buy over and above enough to pay your bills and provide for your family will make you happy for more than a half hour. What I’m saying is I’m not worried about it.

Manuel Verissimo
Manuel Verissimo
1 month ago
Reply to  FleetwoodBro

If all those guys thought their jobs sucked, they’d do it exactly 1 year, quit and stop worrying about money for the rest of their lives. That’s what I’d do anyway.

Last edited 1 month ago by Manuel Verissimo
Bearddevil
Bearddevil
1 month ago

If you look at the trend in C-suite personnel turnover, and change that “one year” to “until my options vest”, that really seems to be exactly what they do.

I find it “interesting” that CEOs seem to be much, much more fungible than the employees who actually create the products or provide the services, and yet they are treated as exponentially more valuable and indispensable than the senior engineers/scientists/chemists/etc. who actually have what is much closer to irreplaceable knowledge. How often do we see a company parachute in a new CEO to “transform” and “disrupt”, and then they bounce after 2 years with a golden handshake, before the dust settles on the chaos and consequences of the trendy changes that they insisted on making? Way too often, in my opinion.

The F--kshambolic Cretinoid Harvey Park
The F--kshambolic Cretinoid Harvey Park
1 month ago
Reply to  FleetwoodBro

> That job sucks and nobody likes you

Something tells me Tavares would get that treatment no matter what job he had.

Col Lingus
Col Lingus
1 month ago

So thankful your Grandma survived what was a true hell on earth time. I hope the rest of her life was good for her.

Sydney Sweeney? She is really hot in the Stones “Angry” video.
Makes me wish I was a chicken too.

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