Stellantis CEO bullish on US as shareholders vote against pay package

The logo of Stellantis is seen on a company building in Velizy-Villacoublay near Paris, France, February 23, 2022. REUTERS/Gonzalo Fuentes

April 13 (Reuters) – Stellantis (STLA.MI) chief executive Carlos Tavares took a bullish stance on the U.S. market on Wednesday despite growing fears of a downturn as the automaker’s shareholders voted against the plan to 2021 compensation for senior executives.

Speaking at the automaker’s annual general meeting of shareholders, Tavares said Stellantis confirmed its forecast for a double-digit operating margin this year, and added that expected sales in North America, particularly in its very profitable American activities, should increase by 3%.

The company, whose brands include Peugeot, Fiat, Opel and Maserati, posted a better-than-expected adjusted operating profit margin of 11.8% last year, with a record 16.3% in North America. Nord, where it sells highly profitable Jeep and Ram pickup models. .

Despite these results, just over 52% of Stellantis shareholders voted at the meeting against the 2021 report on executive compensation, including Tavares.

However, the vote will not affect the compensations planned for last year, based on the legislation of the Netherlands, where Stellantis is based.

“Today’s pay vote is advisory only, so the 2021 pay report will be implemented,” a source familiar with the matter told Reuters.

Chairman John Elkann said Stellantis would heed the shareholder vote, which he described as a recommendation.

“As a board of directors, we believe that in a meritocracy, rewarding based on performance criteria is a fundamental part of our policy,” Elkann told shareholders. “We will resume this vote which is, once again, a recommendation”.

French public investor BPIFrance, which has a 6.15% stake in Stellantis, was among those who voted against the 2021 salary package, which was around 19 million euros ($20.6 million). ), plus a share package worth an additional €32 million and long-term compensation of approximately €25 million.

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French Finance Minister Bruno Le Maire said Tavares’ offer was “excessive”, but added that France could not cap executive pay on its own for fear of losing the company’s top talent.

“This salary is excessive and must make us reflect on the level of remuneration of CEOs compared to staff salaries, but we must do it at European level because otherwise we will lose all the good CEOs who are able to deliver good results” , did he declare. said on France 5 television.

Stellantis said later Wednesday that it was taking note of the comments resulting from the advisory vote on the compensation report and would explain in the 2022 compensation report how that vote was taken into account.

Tavares also said the company expects sales to be up or flat in all of its major markets in 2022 and reiterated a positive cash flow forecast at the end of this year.

Light vehicle sales fell 17% in the United States in the first quarter as a global chip shortage and the Ukraine crisis slashed inventories and rising prices pushed less affluent buyers out of the market.

($1 = 0.9206 euros)

Additional reporting by Geert De Clercq; Written by Nick Carey; Editing by Jan Harvey, Bill Berkrot, Mike Harrison and Bernard Orr

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