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Stellantis shareholders approved a controversial €23.1 million compensation package for former CEO Carlos Tavares during the company’s annual meeting on Tuesday in Amsterdam. Despite Tavares’ early resignation in December and Stellantis facing plummeting vehicle sales in Europe and the US, around 67% of investors supported the payout. The package includes a €2 million base salary, €500,000 in retirement perks, and €20.5 million in performance-related incentives, sparking widespread criticism.

Critics Slam CEO Compensation Amid Poor Company Results

Investor groups such as Allianz Global Investors and Proxinvest urged shareholders to reject the pay package, citing Stellantis’ poor financial performance and Tavares’ controversial departure. Allianz, in particular, questioned the €20.5 million performance bonus, pointing out that the automaker faced weak sales, profit warnings, and deteriorating margins. Tavares stepped down early, leaving the company months before his planned 2026 exit due to clashes with the board over the company’s electric vehicle (EV) strategy.

The automaker issued a profit warning in late 2024, after vehicle sales in key markets such as Europe and the US sharply declined. Stellantis lowered its margin forecast from 10% to as low as 5.5%, while cash flow estimates turned negative, with losses projected between €5 and €10 billion. This financial slump has led to increased criticism of the CEO’s pay package.

Political and Public Backlash Over Pay Decision

Italian politicians, including Deputy Prime Minister Matteo Salvini, voiced strong disapproval over the generous severance. The criticism echoed the backlash Tavares faced in 2022, when shareholders rejected an earlier proposal for his compensation. Politicians and investor groups have consistently pointed to Stellantis’ struggling performance as a key reason for questioning the payout.

While Tavares’ exit was framed as a personal decision, critics argue that his departure—following tensions over the company’s EV strategy—raises concerns about leadership stability at a time when the global auto industry faces increased competition and regulatory pressure.

Stellantis Faces Leadership Uncertainty

Stellantis is currently on the lookout for a permanent CEO, having appointed Chairman John Elkann as interim leader. Sources close to the matter revealed to Reuters that the company has narrowed down its candidate list to five individuals. This uncertainty over leadership comes as Stellantis seeks to navigate challenges, including its ability to adapt to a rapidly changing automotive landscape.

Elkann, speaking on behalf of Stellantis, acknowledged the critical period the company is in and emphasized the importance of a strategic approach to the future. While Tavares’ departure may have created short-term challenges, Elkann is leading Stellantis through a crucial phase as it seeks a permanent CEO who can drive the company’s next stage of growth, particularly in electric vehicle development.

The Trump Tariff Plans Impacting the Auto Industry

The broader auto industry is also grappling with new challenges, particularly due to President Donald Trump’s trade policies. Starting on April 3, the US imposed a 25% import duty on foreign cars, which has put significant pressure on global automakers, including Stellantis. Trump also announced additional tariffs on auto parts, set to take effect on May 3.

This move has sparked concern among industry experts, who worry that these tariff policies could create long-term instability. While Trump has suggested potential exemptions for certain automakers to give them time to relocate production to the US, analysts are skeptical about the effectiveness of these plans. They argue that lengthy relocation timelines and the uncertainty surrounding tariff policies could deter investment in both the US and European automotive markets.

John Elkann weighed in on the issue, warning that rigid rules and high tariffs would be detrimental to the car industries in both Europe and the US. He welcomed any potential relief but stressed that what the industry truly needs is long-term clarity in policy to ensure sustainable growth and investment.

The approval of Carlos Tavares’ €23.1 million compensation package has triggered significant backlash from investors, political leaders, and the public, reflecting the widespread frustration with Stellantis’ recent performance and leadership changes. While the company navigates a period of uncertainty, particularly with its CEO search and the impact of Trump’s trade policies, its future direction remains unclear. The need for clearer, more stable leadership and long-term strategic planning is critical as Stellantis faces a competitive and shifting automotive landscape.