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.

Vidframe Min Top
Vidframe Min Bottom

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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Phantom Pedal Syndrome
Phantom Pedal Syndrome
3 months ago

“Odelay” blew my mind when I first heard it.
I remember exactly where I was, on my bicycle delivering newspapers, when ‘Where It’s At’ came on the local alternative rock station.
I stopped pedaling, dropped my bike and fumbled for the record button on my Walkman.
“What is this?!”

Little sheltered suburbia SLC pre-teen me learned how to swagger right then and there. Though I didn’t yet know the word.

“This is the next album I will mail order through Columbia Records I thought to myself.”

Matt Sexton
Matt Sexton
3 months ago

At the risk of getting seriously flamed here, because it might not be a popular opinion. But the answer to your Big Question is Yes, but also No.

First, the answer is No, because you can’t quantify people that way. Is he “worth” more than your loved ones? Of course not. You don’t put a dollar value on people.

However, the answer is also Yes. It’s not the person that’s worth that, it’s the job that is.

My family owns a NAPA auto parts store, and as a result I’ve had the opportunity to personally meet the current and previous two CEO’s of Genuine Parts Corporation, the parent company of the NAPA brand and many other units globally. It’s a big operation. And my experience in these meetings, is that just based on what they know and what are responsible for on any given day, yes they are worth what they are paid.

Your typical CEO has a master’s degree, knows the ins and outs of their business down to a surprisingly basic level, is quite adept with a balance sheet, is comfortable speaking live in front of thousands of people, and is comfortable negotiating deals worth billions of dollars with governments and the heads of other powerful global corporations. They are most often fluent in several languages, and spend a LOT of time in hotels and on airplanes. And when they are, they’re working. They’re constantly on notice to solve problems, make decisions and chart the course of the company that will impact thousands of other people. You ever watch an NBA game, and it’s not going well and the coach calls a timeout, and five NBA players come to the bench and the coach has to have something ready in an instant to tell these guys, this is how we’re going to win this game? Being in charge is like that, all the time.

In any given large multinational corporation, there are three, maybe four guys tops, that have the skillset and the desire to be the CEO. So when the talent pool is that small, the price of the job goes up. I’m not saying line workers at Stellantis aren’t skilled, but there are thousands of guys out there that you can train pretty easily to be a serviceable line worker. So the price of the job goes down. Are the line workers as important as the CEO? Arguably yes. But if you want a good CEO, you’re going to have to pay to get a good one. Because realistically they don’t grow on trees. I know people like to think, anyone can be a CEO, it’s not hard. Unfortunately no they can’t, and if they tried most people would be overwhelmed in a matter of hours.

As an aside, the reason we keep getting dopes to run our country, is that the people least qualified to assess anyone’s fitness to be the president, are the ones deciding who gets that job. It’d be like asking the fry cooks who they think should be CEO of McDonald’s. Unfortunately the opposite is cronyism at best and dictatorship at worst, so I guess the system we have is the least of many evils.

Last edited 3 months ago by Matt Sexton
getstoneyII (probably)
getstoneyII (probably)
3 months ago
Reply to  Matt Sexton

No argument from me, as that is pretty much exactly what I said in my comment below.

Space
Space
3 months ago
Reply to  Matt Sexton

Thank you for bringing your perspective and not being afraid to tell the truth.

Vetatur Fumare
Vetatur Fumare
2 months ago
Reply to  Matt Sexton

All true, but it would be just as true if his compensation was 50-fold. I know some people at that level and they are all driven by more than just money. They wouldn’t do it for free, but they thrive on the power and responsibility and attention.

Mark Tucker
Mark Tucker
3 months ago

I’m partial to Modern Guilt when it comes to Beck albums.

And does ol’ Carlos pay 518 times as much in taxes? If so, then I guess it’s not any of my business. But I highly doubt he does.

Marteau
Marteau
3 months ago
Reply to  Mark Tucker

He does not.

Taargus Taargus
Taargus Taargus
3 months ago

Big Question Answer: No.

Odelay is awesome but Midnite Vultures is even better?: Yes. This is the best take.

I’m glad you opted to skip playing Midnite Vultures for your grandmother though.

Last edited 3 months ago by Taargus Taargus
My Goat Ate My Homework
My Goat Ate My Homework
3 months ago

I think companies could get similar results with lower pay. I think fear drives a company’s board to over-pay. If the CEO fails then the board can say “we got the best of the best – look at what we paid them” and they remain on the board. If they were frugal, and got “good enough” for a more reasonable amount and the CEO fails then the board gets replaced because they didn’t get (ie. pay for) the “right person”.

Executive pay is out of control and continues to climb. BUT, nobody seems to care. The courts in DE basically just told Tesla shareholders they were getting screwed by their board and Musk. Musk said, “fine, I’ll just move the company to TX” (because it’s good for Musk, and for no other reasons) and the shareholders just shrugged. As long as they get their cut.

Stef Schrader
Stef Schrader
3 months ago

I, too, would accept compensation of “only” $2.2 million.

I like the ideas of tying executive pay to actual performance—good and bad—and the median pay overall, as folks noted below. I get that it’s a big company with big responsibilities, but it really feels like a rising tide only lifts the boats at the top anymore, and cuts only ever affect the people who actually make the products and do the more granular legwork of selling them. Like, if you’re this profitable, you shouldn’t have dragged your feet THAT much in union negotiations. Those employees also deserve to be paid well for their company’s success.

That being said, that is a big $2.2m item in the annual company budget that could be halved if you hit rough times, Stellantis—and he’d still have $1.1m in base salary. Granted, Stellantis seems to be doing okay aside from Hornets in Predicaments and the weird lack of product over at Chrysler, so the rest of this comment isn’t about them right now, but over in the journo world where I’m constantly seeing colleagues get laid off, budgets get axed and outlets close through the mismanagement at the top of the company? If an executive leads a company into a place where they’re thinking about axing a bunch of jobs, their pay really should be the first thing to suffer cuts instead. It’s a lot easier for a highly paid exec to weather rough times and pay cuts than it is for a rank-and-file employee making exponentially less.

Last edited 3 months ago by Stef Schrader
Tap-n-Die And Some WD-40
Tap-n-Die And Some WD-40
3 months ago

Beck’s best album is definitely The Information.

EmotionalSupportBMW
EmotionalSupportBMW
3 months ago

Capitalism! always rationally rewarding labor to it’s social value. Our friend Carlos here, making 38,000,000 million dollars is frankly alot of money. Especially say compared to the average New Haven police officer who makes around 84,000 a year. Now if we all 394 sworn police officers currently employed by New Heaven, their payroll is around 33,096,000. So, is this guy truly worth the entire New Heaven police department plus an extra five million dollars. IDK, giving birth to the Dodge Hornet doesn’t seem as valuable as being the entire police force of Mid-sized city. And that maybe we overvalue and overcompensate people in certain cooperate jobs as almost this legacy of Feudalism. As when the persons who had extensive capital to start early cooperation’s were often land holding nobles or those that wanted to be. So when we got around to taking all the fun and servitude of being a Lord. They compensated themselves by creating a myth that a person in charge, such as CEO needs to be make as much as the entire police department of the third largest city in Connecticut because its tough going to meetings all the time.

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
2 months ago

> 38,000,000 million dollars

Back of the envelope says that’s $38,000,000,000,000 and it is indeed a lot.

My 0.02 Cents
My 0.02 Cents
2 months ago

Stellantis made $20 billion in profit last year alone, they shared 1.9 billion Euros across 242,000 eligible employees. 38k of them were in the USA and got checks of $13,360.

https://www.detroitnews.com/story/business/autos/chrysler/2024/02/15/stellantis-profit-sharing-checks-uaw-2023-earnings/72595398007/

This is a huge amount more than the payroll of a police dept.

Is he worth it? Maybe he is.

TDI_FTW
TDI_FTW
3 months ago

on the average earnings of workers at Stellantis, is that counting average full time for the full year employees or does that also include part time / partial year employees?

getstoneyII (probably)
getstoneyII (probably)
3 months ago

My old man was a big shot at GM many moons ago and, yes, he was paid quite a bit more than the average worker. He was worth every penny, too. From dealing with world leaders and securing deals in what many considered less than ideal places to do business, meeting with different division heads and departments and knowing when to bust ass and award results, dealing with the media etc., he was on the clock 24 hours a day/7 days a week. GM did quite well because of him, and he did well because of GM. That’s just how it goes at that level.

Sure, these CEOs aren’t on the factory floor or pulling all-nighters in the design studio, but what they have are the right mix of intangibles that allow the biggest of picture functions to become reality. I can’t say I’m all that familiar with what Tavares himself has specifically done, but I bet he has done it better than almost anyone else on the planet in this particular field.

With all that said, Tavares is indeed worth it.

Last edited 3 months ago by getstoneyII (probably)
Scotticus
Scotticus
3 months ago

I was waiting for the punchline and it just never came. Your comment was apparently completely serious. Wild

getstoneyII (probably)
getstoneyII (probably)
3 months ago
Reply to  Scotticus

I’m not sure where you are going with that. Feel free to explain…

David Smith
David Smith
3 months ago

It kind of struck me when I saw what the average Stelantis worker makes. That’s about what I make running a company that has about $500K in revenue per year. Now I expand on what a pita my job is times whatever Stelantis’s revenue is and I come up with a pain in the ass factor that is beyond comprehension.
So, maybe worth it?

Dogisbadob
Dogisbadob
3 months ago

Just too bad Stellantis cars suck 🙁

MATTinMKE
MATTinMKE
3 months ago
Reply to  Dogisbadob

That’s the part I don’t get. How are they making money?

Marteau
Marteau
3 months ago
Reply to  MATTinMKE

By cutting costs.

My 0.02 Cents
My 0.02 Cents
2 months ago
Reply to  MATTinMKE

They made $20 billion last year alone.

Knowonelse
Knowonelse
3 months ago

Concerning Carvana, what comes to mind is the Japanese film, Madadayo. From IMDb is this tidbit, “Every year his students celebrate his birthday, issuing the question “Mahda kai?” (not yet?), just to hear Uehida-san’s answer “Madada yo!” (No, not yet!)”. It was on TCM a while back and I just finished watching it last week.

A. Barth
A. Barth
3 months ago

True story: I was so excited to get the Beck record “Odeley” in 1996

I don’t think “Odeley” is Beck’s best album

Psst – it’s “Odelay”.

Mr. Asa
Mr. Asa
3 months ago
Reply to  A. Barth

Chill, my guy. He said it wasn’t his favorite album. Of course he doesn’t know how to spell it.

Jeff Brown
Jeff Brown
3 months ago
Reply to  Matt Hardigree

True story: I was voted most likely to look like Stephen Malkmus in my senior year of high school (1996). It didn’t come true because I went bald in my 20s and grew a beard. However, Stereopathic Soulmanure is still my favorite Beck album. Satan Gave Me a Taco cracks me up to this day!

Farty McSprinkles
Farty McSprinkles
3 months ago

Do you think the CEO has more or less than 518 times the amount of influence of the average employee on the value shareholders see in the company? Do you think it would be more or less than 518x as hard to find a replacement for him? Corporations exist to provide value to the stockholders. That is the only reason they exist. The CEO is at least 518x as important to make that happen as the average employee. CEOs get paid a lot because they are valuable to the company and good ones are hard to find. You could not do his job, and neither could 99.9% of Stelantis employees. Stop this pandering nonsense about CEO salary.

Knowonelse
Knowonelse
3 months ago

If a line workers screws up, it is noticed immediately. The further up the chain, the longer it takes to realize the screw up, and the more it takes to correct it. At the top, CEOs and the like make decisions that take years to reveal whether they made good plans or not. Their compensation should lag behind the consequences of their actions. If they plans work, great pay them well. If their plan fails, they get nothing beyond base pay. The way it works right now is that they get the big bucks regardless if their plans work or fail.

Signed – victim of the bad decisions of the CEO of HP Fiorina

My Goat Ate My Homework
My Goat Ate My Homework
3 months ago
Reply to  Knowonelse

That’s how everyone is paid. If a line worker screws up, they still get paid for it. I may do work today that costs the business millions in 5 years. But, I got paid for it and may or may not be around if something like that happens.

And, executive pay usually DOES lag, for years. It’s stock options on a vesting schedule.
The pay a CEO takes home this year is based on their salary plus options they exercised that were earned years ago. The rest of the numbers you hear about is the current value of the stock options that may or may not be worth anything in 3 years when they can be used.

Not saying it feels good to see people get paid when we might not be, but it doesn’t mean it’s wrong.

1973 BMW Bavaria Addict
1973 BMW Bavaria Addict
3 months ago
Reply to  Knowonelse

While I can understand this line of reasoning, I don’t believe it’s constructive. First, that CEO does not have a union behind them, and is living under a constant sword of Damocles. One bad interview, or some freak market trend, and they’re blacklisted forever. Further, whereas a line worker has a relatively simple set of instructions to perform their job, the CEO has myriad responsibilities and tensions, all of which require judgement.

There are two distinctions that matter in an employee’s compensation; P&L Responsibility (whether the outcome at the bottom line matters), and judgement calls (how much liberty an employee has to make a choice). A line worker will have practically none of either of these. A CEO has almost complete autonomy, but total responsibility. That is why the suicide rates and addiction rates are so high, and that’s why they get paid like they do.

CEOs can be grating, and it takes a specific type of person to run a major corporation. But their pay is absolutely hooked to the value they provide (as is evident by the disaster that you alluded to with the Fiorina years), and they live with that.

The real issue moving forward is that we have allowed every industry to underpay or offshore workers to the point that the only people making any money are executives, institutional investors, or lenders. We’re all down here squabbling about executive compensation, when we should be fighting for wages, and a stronger regulation of daytrading and hairbrained capital markets.

Bongo Friendee Harvey Park
Bongo Friendee Harvey Park
2 months ago

> One bad interview, or some freak market trend, and they’re blacklisted forever.

Nah. See Jeff Nardelli, for example. They live in rarefied circles where they’ll always be able to find $$$$ work.

Icouldntfindaclevername
Icouldntfindaclevername
3 months ago

It’s not for me to decide on what a CEO’s pay is. It’s between the company (Board) and the CEO’s request. Do I think it’s a shit load of money, yep. Is 1 person worth it when in actuality they are just a figure head and do little for day to day operations, nope.

Tom T
Tom T
3 months ago

Stop with the commie mindset. If you can argue that someone else doesn’t deserve their pay anyone can just as easily (actually much easier) argue that neither do you. The only pay you deserve is the one you agreed to.

V10omous
V10omous
3 months ago
Reply to  Tom T

I don’t get it either.

What makes anyone “worth it” or not? Too often it seems like the attitude is “if you make more than me, you’re overpaid” which strikes me much more as jealousy than actual economic analysis.

I had hoped this attitude would be left at the old place.

V10omous
V10omous
3 months ago
Reply to  Matt Hardigree

I’m curious what that has to do with anything.

If shareholders/the board are truly unhappy with executive compensation, they can make a move and change CEOs. After all, if we’re being realistic, the $39M is coming out of their pockets more than it is from the workers.

I guess I wonder where the line is. The editorial slant of the site is 100% in favor of the union workers striking for as much pay as they can get. Which is fine. But then why shouldn’t Tavares then go for as much as he can get too? He’s not extorting that money from Stellantis or committing crimes to get it; it’s a contract agreed to in good faith and approved by the board.

Last edited 3 months ago by V10omous
Marteau
Marteau
3 months ago
Reply to  V10omous

“After all, if we’re being realistic, the $39M is coming out of their pockets more than it is from the workers.”

I’ve rarely read something as dumb as that quote, pretty sure you’re overpaid.

Marteau
Marteau
3 months ago
Reply to  V10omous

As a reminder, there would be no 39millions in their pocket, to pay this guy (that i see way too often chilling on historic races paddocks, for someone tht works 24/7) without the workers.

My 0.02 Cents
My 0.02 Cents
2 months ago
Reply to  Matt Hardigree

And they made 20 Billion USD (world wide) last year, which they shared 1.9 Billion in profit sharing schemes to 242,000 eligible employees world wide.
Of which just over half a billion went to 38,000 eligible USA employees.

https://www.stellantis.com/en/news/press-releases/2024/february/stellantis-employees-rewarded-nearly-1-9-billion-worldwide-for-2023-performance-totaling-6-billion-since-company-creation

https://www.detroitnews.com/story/business/autos/chrysler/2024/02/15/stellantis-profit-sharing-checks-uaw-2023-earnings/72595398007/

Marteau
Marteau
3 months ago
Reply to  V10omous

I had hoped you were left at the old place too.

V10omous
V10omous
3 months ago
Reply to  Marteau

No such luck, my overpaid self will be here annoying you forever

DadBod
DadBod
3 months ago
Reply to  Tom T

Counterpoint: anyone defending CEO pay is hoping to get on the bandwagon. The resource hoarding is feudal. These people do not add 500x value to their companies, especially if you use quarterly market bullshit as a measure.

Nsane In The MembraNe
Nsane In The MembraNe
3 months ago
Reply to  Tom T

Thinking a ludicrous amounts of income inequality are bad isn’t communism, it’s common sense.

1973 BMW Bavaria Addict
1973 BMW Bavaria Addict
3 months ago

But does that inequality in income reflect a commiserate inequality in responsibility? Put another way. Do you want a guy who will work for $400,000/year (a typical salary for the president of a small, private four-year college) running ~$190,000,000,000.00/year company with 272,000 employees?

Nsane In The MembraNe
Nsane In The MembraNe
3 months ago

This isn’t an either/or situation. It’s about finding a balance. I’m actually not at all opposed to people who provide vital, highly skilled services getting paid well at all. It doesn’t bother me in the slightest that neurosurgeons can make 7 figures, for example.

What does bother me is disparity that is this ludicrous. There comes a point where the value of the work becomes dramatically overinflated. Do I think Mr. Tavares should be working for $400,000 a year? No. That’s ridiculous.

As someone who’s in a leadership position themself I definitely understand that greater responsibility means greater stress. I’m at the highest level I’ve been at professionally right now and it’s easily the most work and the most stress I’ve ever had to manage by a country mile. It’s also the most money, as I take home nearly 50% more than the median salary for someone with my credentials.

However, that doesn’t mean that a CEO and other C suite people are worth 3-500 times as much as the average household takes home. That’s ridiculous, especially when the average household in the US brings in about $70,000 and economic conditions are continuing to deteriorate for pretty much everyone other than the top 10% or so of earners.

I guarantee your average paramedic has a significantly more stressful and intense day to day experience than freaking Carlos Tavares or Mary Barra does. Unlike some other folks I’m not going to say their skills and work aren’t valuable-they definitely are. But they’re not doing 500 times the amount of work or shouldering 500 times the amount of stress that their average employee is, and this level of wealth and resource hoarding by the .1% has serious negative consequences for our society and has throughout human history.

That’s where I’m coming from, if that makes sense. I don’t mind the people at the highest levels of their fields being wealthy. I do mind when they’re so egregiously overcompensated that it’s harming our society.

Matt Sexton
Matt Sexton
3 months ago

Considering the median Stellantis UAW worker makes right around $100k a year, what would you say would be an appropriate annual compensation for the CEO? A million a year would only be 10x more than said median employee.

Dead Elvis, Inc.
Dead Elvis, Inc.
3 months ago

It’s exceedingly rare that anyone who throws out “commie” as an insult does so in a way that works, or even demonstrates that they understand the term.

That certainly wasn’t one of those rare cases.

Scotticus
Scotticus
3 months ago
Reply to  Tom T

No filthy rich people are going to see this comment and bring you into the club, bro

Rapgomi
Rapgomi
3 months ago
Reply to  Tom T

Can I negotiate my pay with a board of people who know that I will be on the board that negotiates their pay? Executive pay is out of control because executives know what they pay other executives will later benefit them.

To make it more fair, perhaps Union employees from other car companies should be on a board that determines the wages given to Union employees at Stelantis.

Nsane In The MembraNe
Nsane In The MembraNe
3 months ago

No one is worth even half of that much

OverlandingSprinter
OverlandingSprinter
3 months ago

Sportsball talk radio just entered the chat.

My 0.02 Cents
My 0.02 Cents
2 months ago

There’s a Japanese Baseball player who strongly disagrees. $700m over 10 years, although he is deferring most of it, he is still getting it.

Stellantis made 20 Billion USD worldwide last year and shared 1.9 billion euros with 242,000 employees. Just over half a billion was shared in the USA across 38,000 eligible employees.

The numbers are staggering, so is his salary. I don’t think we get to decide whether it is right or wrong. his employers are okay with it. Shouldn’t we celebrate his success?

Who Knows
Who Knows
3 months ago

Perhaps for robo-taxis to be a viable business, they need to use all of the sensors and tech for extra uses while driving around to generate more revenue. Report expired license plate tags, issue parking tickets, etc. Maybe they could even use facial recognition software, and if they locate someone with an outstanding arrest warrant, run them down, pin them under the car, call the authorities, and collect a reward? That could be right up their alley, and I’m sure would not bring any more controversy to the topic.

Canopysaurus
Canopysaurus
3 months ago

To paraphrase the immortal words of Roberto Duran during a beat down from Sugar Ray Leonard, “No MaaS, No MaaS.”

No, Carlos Tavares is not worth that much. But then, neither is DeSeanWatson, Taylor Swift concerts, Tom Cruise movies, Donald Trump branding, Air Jordans, or Elon Musk’s cars. When did that ever stop people from overpaying?

Drew
Drew
3 months ago

“We tie CEO pay to company performance” means he makes too much on a bad year and an obscene amount on a good year.

DadBod
DadBod
3 months ago

Isn’t Carvana just a giant subprime loan operation?

Nsane In The MembraNe
Nsane In The MembraNe
3 months ago
Reply to  DadBod

Yup! They’re basically a nationwide buy here pay here lot with a flashy gimmick. I’ve occasionally poked around on their site and their financing rates are hilariously, shamelessly, overtly terrible. Unfortunately they continue to do somewhat decent business because folks that are credit challenged/not as financially savvy get treated like shit by traditional dealerships, which makes the online/no human interaction process very appealing.

Folks wind up paying $60,000 over 8 years for a $20,000 used Rogue and capitalism marches on.

Data
Data
3 months ago

On another site I read Caravana makes an average of over $5k per vehicle sold.

IRegertNothing, Esq.
IRegertNothing, Esq.
3 months ago
Reply to  DadBod

I call them the Ticket Master of used cars.

Matt Sexton
Matt Sexton
3 months ago

Matt, I know I’ve said this before, but I just really love how you perfectly balance having fun and being a bit silly, with actually reporting the news in a journalistic, factual way.

It’s this kind of irreverence that you guys have here while still being a good source for car news and community that makes me really, really hope this site thrives and survives for a very long time.

getstoneyII (probably)
getstoneyII (probably)
3 months ago
Reply to  Matt Sexton

Somebody brought their apple to school today! lol

getstoneyII (probably)
getstoneyII (probably)
3 months ago
Reply to  Matt Hardigree

Hahahha!

Chris Stevenson
Chris Stevenson
3 months ago

No one is worth that much, period.

My 0.02 Cents
My 0.02 Cents
3 months ago

While I agree it’s excessive, what is the right amount for that position.
I do think there should be bonuses related to company profitability, as should everyone in the company.

Drew
Drew
3 months ago
Reply to  My 0.02 Cents

I would love to see CEO pay based on median employee pay. I don’t know where you’d put that, but capping it to some multiple of median pay would encourage wage growth for everyone, rather than just the executives. If he made 10x the average employee (that’s cited, so I’m using it instead of median), he’d be at 760k. 100x is 7.6 million.

I struggle to believe a CEO deserves 100x a worker’s wage, and he’s well beyond that.

Last edited 3 months ago by Drew
My 0.02 Cents
My 0.02 Cents
3 months ago
Reply to  Drew

I think I’m okay with 7 figures and a small percentage of net profit.
I honestly don’t know how to make a pay structure for that kind of position.

but a strongly believe that everyone should get a share of the profits as a percentage based on their income.

What amazes me is how much sports stars make. that Japanese baseball player getting $700m over ten years. although the bulk of it is been deferred he should still get the full amount…

DadBod
DadBod
3 months ago
Reply to  My 0.02 Cents

Sports isn’t really analogous, though. The career is short, the risk of career-ending injury is high, and the contracts are short. Furthermore the athlete is the product/value, unlike a CEO. Now are sports in general worthy of the money poured in? As a nerd I’d argue no.

My 0.02 Cents
My 0.02 Cents
2 months ago
Reply to  DadBod

I’m with you on the risk of injury ending a career (or life) short. Then I googled the length of a CEO tenure and got this.

“The data reveals 39% of S&P 500 CEOs have tenures ranging from one to five years, and 28% maintain tenures falling between five to 10 years. Interestingly, these two percentages alone account for over 50% of the CEOs involved in this study, indicating a majority of them serve for 10 years or less”.

from here, I have not read it all.

https://corpgov.law.harvard.edu/2023/08/04/ceo-tenure-rates-2/#:~:text=The%20data%20reveals%2039%25%20of,for%2010%20years%20or%20less.

So it would appear that two thirds of the S&P 500 CEO’s stay for less than 10 years. I’d also go as far as to say that if they are poor performers then there’s a lot more people negatively impacted and possibly out of work, than a baseball team.

On the bright side Stellantis employees got to share in 1.9 Billion Euros of variable pay (whatever that is) and profit sharing. which I think should have been mentioned in the article.

https://www.stellantis.com/en/news/press-releases/2024/february/stellantis-employees-rewarded-nearly-1-9-billion-worldwide-for-2023-performance-totaling-6-billion-since-company-creation

and this

https://www.freep.com/story/money/cars/chrysler/2024/02/15/stellantis-profit-sharing-checks-uaw-members-2024/72586634007/

Drew
Drew
3 months ago
Reply to  My 0.02 Cents

Sports and entertainment pay boggles the mind. You have people basically paying to participate at the low levels, up to amounts most people won’t make in a lifetime at the highest levels. I have trouble even contemplating how to approach those industries’ pay structures.

I do think profit-sharing is a good plan for everyone, but a $2.2 million base salary hitting $40 million seems excessive.

getstoneyII (probably)
getstoneyII (probably)
3 months ago
Reply to  My 0.02 Cents

It’s not so much about what the player makes, but the revenue they generate. Ohtani on his own is going to generate over $1 billion on his own for the value of the team and for the league as a whole in broadcasting rights. He’s bigger than Elvis and The Beatles combined in Japan and much of the rest of Asia. One could even argue that he is underpaid based on how much of that money is deferred. In theory, he could take a larger chunk upfront and make more over time, but he explicitly stated that the contract structure was his idea so that the team could spend more on other players to win more games.

David Smith
David Smith
3 months ago

Yeah, the Dodgers need help with their budget and winning more game. He wants to win a world series and be set up for his next 10 lives living in the lap of luxury.
I’m not saying he doesn’t deserve the money based on how much better he is at playing the game then anyone else in the history of the sport.

getstoneyII (probably)
getstoneyII (probably)
3 months ago
Reply to  David Smith

Correct. Also, no, the Dodgers aren’t exactly strapped for cash, particularly with their new $7b local broadcast rights contract, but that doesn’t mean they want to pay the luxury tax.

Also, note that he makes approx. $40m/year in sponsorship bucks alone. He’s an absolute anomaly in every sense, maybe only equalled by Messi or Ronaldo.

My 0.02 Cents
My 0.02 Cents
2 months ago

So, last year alone Stellantis made $20 billion. Or 20x what Ohtani is going to generate. They shared 1.9 billion Euros across 242,000 eligible employees, world wide

https://www.stellantis.com/en/news/press-releases/2024/february/stellantis-employees-rewarded-nearly-1-9-billion-worldwide-for-2023-performance-totaling-6-billion-since-company-creation

and

https://www.detroitnews.com/story/business/autos/chrysler/2024/02/15/stellantis-profit-sharing-checks-uaw-2023-earnings/72595398007/

If I counted the zeros right that’s just over half a billion to U.S. employees.

Does one guy deserve $40m? umm maybe? I’m more inclined to say yes this morning than I was last week.

getstoneyII (probably)
getstoneyII (probably)
2 months ago
Reply to  My 0.02 Cents

Correct. When you look at $40M in a vacuum it seems preposterous, but when looked at in context, it is pretty reasonable considering the totality of the job, and it’s impact in so many areas.

It’s a drop in the bucket.

TDI_FTW
TDI_FTW
3 months ago
Reply to  Drew

The problem comes in when you think of a 100 employee company having the same median pay as a 100,000 employee company. A company with 100 people is much harder to run than one with 100,000 people.
At the end of the day, the owners of the company decide what to pay their executives. And the majority of public company CEO pay is stock-based, so it doesn’t even really cost the company anything (sometimes) to just generate more stock to give to the CEO.

Drew
Drew
3 months ago
Reply to  TDI_FTW

At the end of the day, the owners of the company decide what to pay their executives.

Sort of. The stockholders get to have an advisory vote on the issue, but the board decides. But, sure. Doesn’t mean that the CEO is worth the money. And the inflation of CEO pay vs employee pay can certainly lead people to wonder how much CEOs are really worth.

And the majority of public company CEO pay is stock-based, so it doesn’t even really cost the company anything (sometimes) to just generate more stock to give to the CEO.

Sort of. Diluting the stock isn’t ideal, and issuing large quantities of new stock generally requires a vote by shareholders. So companies often buy stock to award (or to counter the dilution). Since these stock awards vest over a few years, they can spread the cost or dilution across those years, which helps, but it’s not really free, generally.

We have minimum wage laws. There’s nothing stopping us from enacting laws that would restrict massive CEO payouts. Or at least going back to a tax structure that disincentivizes such large payouts. In the 50s, we had top tax rates as high as 91%. The effective rate after various ways to avoid paying the full rate was much lower, (with some estimating that the richest paid about 45%) but still significantly higher than today’s top rate of 37% (which isn’t actually what gets paid, especially since capital gains make up a lot of the highest incomes and are taxed at much lower rates).

1973 BMW Bavaria Addict
1973 BMW Bavaria Addict
3 months ago

The problem with this line of reasoning is that anyone with the chops to run an international automaker (which is really better described as a multi-national) could be making that much or more out in the private markets. There’s a lot of money flying around, and you have to pay someone enough to be interested. Besides, I haven’t heard a peep from the Agnelli family about how much he’s getting paid.

The Dude
The Dude
3 months ago

And these CEOs wonder why nobody is buying their expensive EVs…

IRegertNothing, Esq.
IRegertNothing, Esq.
3 months ago
Reply to  The Dude

We just need to wait for it to trickle down. Obviously he will buy 518 vehicles since he makes 518 times as much, right? That’s how the economy works.

Jlacourt
Jlacourt
3 months ago

the company actually posted a net income of $450 million in 2022, compared to a loss of $1.59 billion in 2022.” Huh?

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