Guess Which CEO Thinks He Should Get 60% More Money After Selling Fewer Cars, Cutting Jobs, And Constantly Bickering With The Italian Government

Carlos Tavares Top
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What is a company? Is it the value of everything it owns? Everything it knows? Everything it makes? If it’s a public company, the value is ultimately the share price, or at least that’s how you need to think of it if you’re a CEO. This line of thinking can get dangerous (see: Boeing), but it’s logical.

Carlos Tavares, CEO of Stellantis, is nothing if not logical and always seems to have an eye on the share price. The company is in the middle of a harsh transition that’s seen beloved products slowly fade away, once popular brands falter, and seemingly endless turmoil. At the same time, Stellantis has remained highly profitable. Is that enough to hand him a 60% pay increase? Some shareholder advisory firms are saying not so fast.

Also encouraging a reevaluation is Chinese President Xi Jinping, who is hosting German Chancellor Olaf Scholtz and some car execs in the country.

Do you love the Rennaissance Center in Detroit? I do not love the Renaissance Center in Detroit. But I understand its importance, so I’ll be watching what happens to the building now that General Motors is leaving its long-serving HQ for a new development.

And, finally, Nissan is a little closer to solid-state batteries, which could be a big deal.

Carlos Tavares Is Fun To Write About

Carlos Tavares Snl
Screencap: SNL

Ford CEO Jim Farley is fun to hang out with because he’s a car nerd and generally pretty affable. He knows how to tell a story. He races cars. The counter-intuitive reality of journalism is that the more fun someone is the less fun they are to write about and, true to form, Farley isn’t a regular character in The Morning Dump.

You know who is a regular character? Carlos Tavares, pictured above with Tom Hanks.

Carlos Tavares is always getting into scrapes. As a CEO he clearly has an idea of what he wants his large, global automaker to be. Specifically, he’s trying to build an extremely efficient car company with a balanced portfolio of products built on a small number of shared platforms that utilize regionally popular brands for extra marketing push.

The problem is that the actual company he sits atop is a mix of three companies that do not have that history. Despite being based in The Netherlands for tax reasons, it’s best to think of Stellantis as the amalgam of three different groups of automakers:

  • Old Chrysler – Whatever is left over from Chrysler/FCA/Cerberus/AMC. While not explicitly state-supported, Chrysler has always vacillated between short runs of profitability and needing some kind of bailout. But Chrysler has Jeep and Ram, two valuable brands.
  • Fiat – Fiat is Italy’s national carmaker, even if it’s not explicitly owned by the Italian government. It also brings with it Alfa Romeo, Lancia, and Maserati, all historic brands whose place in the future is uncertain.
  • Peugeot-Citroën – This is the one automaker that is partially state-supported/owned, which means that Stellantis is somewhat more French than anything.

Making that transition into one company that somehow balances the political desires of those three countries (America, France, Italy) with the realities of global production, supply chains, marketing, et cetera is extremely tough.

Just yesterday, we wrote about how Tavares was in an argument with suppliers over his cost-cutting and then, a few hours later, how his company was in a spat with the Italian government. This is, I don’t know, the fifth time we’ve written about Stellantis and Italy beefing?

And, yet, Stellantis is highly profitable. Yeah, sales are down in the United States, and Fiat lost its position as the biggest brand in Italy to Volkswagen. Jeep, maybe its most valuable brand, is faltering. And yet… the company is making money, the shares are up, and investors are getting dividends.

All of this is why Tavares was able to claim a 60% increase in compensation to almost $40 million, which is more than 500x what an average Stellantis employee makes. As the CEO of a public company, however, Tavares needs his compensation approved and that’s where the trouble begins.

From Bloomberg via Automotive News:

At Tuesday’s annual general meeting, advisory firms Glass Lewis and Proxinvest are urging investors to vote against approving the €36.5 million ($39 million) total compensation package, up almost 60 percent from 2022 levels. The package includes a new incentive award worth €10 million tied to meeting electrification and software goals. Two years ago, investors rejected Tavares’s pay plan in a non-binding vote after opposition in France.

There’s another part of this article I think that’s important to highlight:

Tavares, 65, is seeking to make Stellantis leaner to endure in the shift to EVs. The payoff has included a roughly 60 percent share price jump in 2023, even as the company lost ground to rivals in several countries, including France and the U.S., according to forecaster Jato Dynamics.

“There’s a contract between the company and myself, just as there are contracts for soccer players and for Formula 1 drivers,” Tavares told reporters visiting a plant in northern France on Monday. “Also, 90 percent of my salary depends on the company’s results — this goes to show they aren’t that bad.”

Glass Lewis specifically objected to the extra €10 million incentive award for work that it views as “intrinsic” to an executive’s duties.

That’s not unfair. Isn’t it the job of an automotive CEO to make sure its car company is ready for the EV transition? Why should that be a bonus?

Anyway, car company execs named Carlos never have issues related to being fairly compensated so I’m sure this will all go super well.

German Chancellor In China To Try And Normalize Relations

Xi And Scholz
Source: Instagram

The European Union is not pumped about all of these cheap Chinese EVs being shipped to Europe, but the cold-slash-hard reality is that Europe needs China and China needs Europe and all the ongoing arguments, while sincere, are not likely to change that.

One of the countries most tied to China is Germany, which is why German Chancellor Olaf Scholz is doing a tour of the Asian nation with Chinese President Xi Jinping.

Per Reuters:

“China’s exports of electric vehicles, lithium batteries and photovoltaic products have not only enriched global supply and alleviated inflationary pressure, but also contributed greatly to the response to climate change and green and low-carbon transformation,” Xi told Scholz.

“(Germany and China) should be vigilant against rising protectionism, look at the issue of production capacity objectively and dialectically from a market-oriented and global perspective,” Xi said.
Scholz has been cautious about pushing away China, an important market for Germany, saying the EU should not act out of protectionist self-interest.

I love the “look at the issue of production capacity objectively and dialectically” line. China is theoretically a Communist country, but that line kinda gives away the whole game right? The Chinese government needs a strong economy to keep its population placated and access to foreign markets and exports are key to doing that. At the same time, Germany has to sell some Maybachs, so it all works out for everyone (well, minus some light slavery).

This line also reminds me of the importance of a Liberal Arts education. An engineering class will teach you how to do something, and that’s important, but a philosophy class might help you understand why you should (or shouldn’t!) do it.

GM Is Leaving The Rennaissance Center

Ren Cen2
Photo: GM

GM’s giant, 1970s-era high-rise complex in Detroit is called the Rennaissance Center and it’s a key part of the city’s skyline. It’s also a terrible design. Trying to get in a meeting at the Renn Center is like being stuck in an MC Escher drawing where you never end up on the right floor but somehow always end up in a damn Starbucks.

Anyway, GM is leaving the Renaissance Center for a new Dan Gilbert project, which makes sense, but what happens to the old building?

From The Detroit News:

GM, Bedrock and the city also will take a year to consider the right future for the Renaissance Center, which could include commercial, residential or mixed uses, Barra said. She declined to commit to GM’s ownership of the building long-term, saying, “We’re wide open.” Duggan said they’ll look at potential corporate opportunities, smaller tenants and even suggested the city could look at consolidating multiple offices it has throughout the city in the Renaissance Center if it saves money. He added that the state is looking at research and development incentives for the site.

“I’m not sure what the right combination of uses is, but we have the right leaders,” Duggan said. “Nobody knows more about reusing buildings than Dan Gilbert. He’s done one after another.”

Hear me out: Laser Tag.

Nissan Thinks It’s Gonna Make Solid State A Thing

Nissan Solid StateNissan got out early in the EV revolution with the Nissan Leaf but, for various reasons, kinda stumbled. Rather than be the best company in the current EV revolution, Nissan is trying to do what other automakers are doing and skipping ahead to solid-state batteries.

Hans Greimel went on a tour of Nissan’s impending solid-state plant, and it’s interesting to see the timeframe:

Initial volumes will be limited to several tens of thousands of cells, enough to power only a handful of prototype vehicles, executives said during an April 16 tour of the facility.

But the pilot run will gradually scale up to about 100 megawatts per year, or enough for about 1,000 to 2,000 EVs, depending on the battery size, said Executive Vice President Hideyuki Sakamoto, Nissan’s global manufacturing chief.

After mass production begins in the fiscal year ending March 31, 2029, volume could eventually reach between 3 to 30 gigawatts a year.

Set your watches.

What I’m Listening To While Writing TMD

Yesterday, my daughter just asked for me to put on whatever so I queued up my Apple Music station and it just played sad dad music (The National, Bon Iver, et cetera) and she worried about me. Was I sad? Why does Siri think I’m sad? So I played this instead, to show I was happy.

The Big Question

We’ve covered the Tavares thing, so my question is a little less car-centric than usual. What should GM do with the Renn Cen?

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105 thoughts on “Guess Which CEO Thinks He Should Get 60% More Money After Selling Fewer Cars, Cutting Jobs, And Constantly Bickering With The Italian Government”

  2. Hear me out: Laser Tag.

    My vote is for world’s largest escape room.

    Or better yet, “The Die Hard Experience” combination laser tag and escape room!

  3. Losing GM as the downtown Renn Center anchor client is devastating for a city trying to achieve critical mass. Personally, I think GM should renovate it and stay as a gift to the city. Perhaps with better amenities they could attract other occupants.

  4. Please don’t forget that german and british carmakers Opel and Vauxhall also belong to Stellantis. I volunteer for reading articles before they get published. It feels as if the high frequency of output is nibbling away on completeness.

    2. Yeah, Opel and Vauxhall were a part of the PSA Group, but neither the German nor English governments have quite the sway over Stellantis that Italy and France do. I also didn’t mention DS or Abarth.

      1. Also forgot Ferrari, thats kinda an important one. Probably where all of Stellantis profits come from, only say that because I have no idea what else would be generating profits for them.

        2. Ferrari split off and is no longer a part of Stellantis, though Exor (the Agnelli family holding company) does own about 14% of Stellantis and something like 20% of Ferrari.

      2. I understood that Matt’s breakdown of Stellantis wasn’t intended to be an exhaustive compilation of its brands but where the company’s power centers lie.

    1. Or just a really big Ramada Plaza International with it’s own Chi-Chi’s

      “We have you in the Toronado Suite, Sir – Here’s your coupon for a free Margarita and a Chalupa. Enjoy your stay!”

    2. Now hear me out on this: for the 5 towers. Little Ceaser’s, Dominos, Papa Johns, Pizza Hut, and CiCi’s Pizza all get a tower. Whoever has the highest sales each year (number of pizzas sold) gets the central tower. Let the Pizza wars begin!

      1. This is Detroit we are talking about. I vote Hungry Howie’s instead of CiCi’s. The lobby will be dedicated to all the Michigan made potato chip brands. If there is a basement, make that the Michigan made wine and beer cellar. Put a Dragon Mead Brewery on the top floor of the center tower.

  6. I wish Mike Manley was still in charge, FCA had a lot cooler stuff when he was around, it helped make up for the lack of quality/reliability that you got with FCA cars. Now, they’re peddling the same junk, but are taking the soul and excitement out of it.

          1. Stellantis: V8 GO BRRRRR

            Regulations: yeah but that can’t last forever

            Stellantis: FUCK YOU V8 GO BRRRRR AND SCREAMS FREEDOM

            Climate change: it be bad

            Regulations: so about those V8s’ emissions and your horrendous CAFE numbers

            Stellantis: FUCK YOU! V8 GO BRRRRRRRR

            Regulations: you can no longer do this shit, sorry. You had a decade to plan for this so hopefully you came up with something.

            Stellantis: WE’VE BEEN VICTIMIZED BY THE WOKE AGENDA WAHHHHHHHHH POOR US anyway here’s a muscle EV that weighs more than a Tahoe

            Gee, who coulda seen this one coming? If they weren’t such defiant idiots on electrification they could be like Ford and GM right now…still selling glorious V8s for us sickos who still want them. Instead Doge has a shitty half baked Italian crossover and an upcoming EV muscle car that no one wants.

            Carlos Tavares: I DESERVE A HUMUNGOUS RAISE

  9. What should GM do with the Renn Cen?

    Use it, commercial office space values are down in the dumps currently, and most commercial office space is not cost effective to convert into apartments, even at today’s low commercial office space prices.

    Really the only legal thing you can do to get your money’s worth out of it currently is to use it, because noone else will.

    2. The catch is that the buildings already need some major updates/repairs to the HVAC, plumbing, etc. I think that is the reason GM wants out of there now.

      The company has never given me an all expense paid trip to HQ, but from others that have been there and those based there, I have picked up on some angst at having to navigate around in those buildings. Much bigger angst at having to commute to that office, find parking and make their way the rest of the journey to their cubes.

  10. LOL Detroit saying they have the right leaders.

    How the fuck is Stellantis making money? Parts and service? Out-of-warranty work? Who the fuck buys that shit? They are the dump for all the shitty cars. All they need is the British shit, and they are complete.

    It should be illegal to increase executive pay after/upon employee layoffs.

    1. No person is worth $40 million a year. No person is worth 500x the pay of an average employee. Does he do the work of 500 people? No. People who think they’re worth that much, especially after laying anyone off, are cockroaches and deserve to be exterminated as such.

  11. The law of supply and demand is topsy turvy for CEO’s. Surely there are hundred of lower ranked sociopaths in the company more than willing to take the job. Why pay more?

  12. Ford’s HQ is in a pretty awkward spot. Just out there in the suburbs, kinda by a Benihana. What better way to attract hip young staff, then a landmark central office in the center of downtown. Plus Jim can ride a bike in from Grosse Point. Call it the New Edge Center.

  13. I know I keep banging on about “death ray this” and “death ray that”, but could the shiny outside of the RenCen be configured into some sort of reflector/aiming device for a death ray?

    1. I like the death ray idea but who would be on the receiving end? Would it be aimed at Windsor just because they happen to be on the other side of the river? Can it be aimed so that we could take random pot shots across the bow of passing freighters? Could we engrave our initials into the surface of the moon? Can it be used for the world’s largest Pink Floyd laser light show?

  14. I never had a whole lot of faith in this “Stellantis stuff,” but I certainly have a whole let less faith in it now. I’m curious how long it’ll actually be before this relationship sours.

    1. Don’t take Stellantis on an empty stomach or less than 2 hours before bedtime.

      User’s experiencing an inability to achieve an erection while on Stellantis should call their doctor.

      1. User’s experiencing an inability to achieve an erection while on Stellantis should call their doctor.

        Isn’t that the whole point… we don’t want these people reproducing.

      2. Ask your doctor about once daily Stellantis.

        If you or a loved one took Stellantis and died, call the number on the screen now…you may be entitled to compensation.

    2. Around the 10 year mark from when it became “Stellantis” you will start to notice brands being discontinued.

      Chrysler and Lancia being the two most likely…. Chrysler even more so…. but they may sell the brands off to the Chinese….. especially Chrysler.

  15. “and she worried about me. Was I sad? Why does Siri think I’m sad? So I played this instead, to show I was happy.”

    That’s freaking adorable! I love being a dad of daughters. I’ve got two of them. They are the meaning of life for me.

    Anyways, LASER TAG FTW!

      1. Not my Delirium! What a fine beer.

        Also yeah it disappeared, I thought I got locked out for spamming because I’ve been getting all my commenting done before I get going for the day 😛

      2. I thought I was going mad seeing it shake without actually having a new notification, like how I sometimes feel phantom vibrations from my phone in my pocket. Glad to know if I am going mad, I’m not the only one.

  17. A few things here:

    Meg White is awesome. Out of respect for her privacy (I know, blah, blah) I won’t say where, but her and I have had more than one Jager shot in the past, and she is the one of the sweetest people I have ever met. She’s just super cool and very kind and caring.

    The Ren Cen has (had?) one of the greatest movie theaters of all time. It was nearly impossible to find in that labyrinth, so it was almost guaranteed to be a private showing of whatever movie you wanted. Also, no one gave a shit what you did, so you could help yourself to popcorn/candy/drinks and have a smoke if you wanted to. Basically, you’d pay $8 to have a 2000 sq. ft. cinema to even Pee-Wee if you wanted and the seats were super comfy.

    Finally, Dan Gilbert is a monster of a businessman, emphasize the monster part. He is a pretty ruthless individual. He throws a nicely elaborate company party, though. I’ll give him that.

  18. Well, I’ve been in the RenCen twice, both times the GM gift shop was closed, which made me sad, but the carousel of concepts made me happy. They should put a museum of Detroit in there, with a Motown section, a sports section, an automotive/transportation section (complete with karting track) and free People Mover rides, and a natural history section. Put affordable apartments in the mid to upper floors, and bar/grill on the top floor.

    2. The People Mover is already free more times than not. Also, there is already a rotating (sorta) restaurant at the top.

      The Motown Museum needs no help. Everyone tries to duplicate it, but that house is pure magic on its own.

      Not sure the Marriot would give up their lease, if for nothing else than the convention business.

  19. Xi Jinping‘s rehearsed picture face is so amusing. No matter the context, it always looks like he is in the last shot of “Curb Your Enthusiasm”.

  20. I just pulled up The National to make sure I was thinking of the right band, and yes, I love that guy’s voice, but 1000% sad dad music for sure.

    Re: commercial real estate: I was just thinking about this when I was out driving around the other day and struck on a wild-ass hypothesis.

    What if (at least some) companies saw this coming?

    The company for which I work in the mid-10’s sold their enormous building and leased it right back from whoever they’d sold it to. It used to have actual manufacturing capacity, and at least still had a literal substation to itself and huge amounts of high current test cells, high voltage capabilities, etc and so on. But! More and more of the manufacturing floor space was empty every year, so much so even the shipping and loading bays didn’t have much coming or going from them.

    I remember thinking how ridiculous it seemed at the time – what were we gonna do without all those test cells and high voltage and current capabilities? There was an answer, it was just bleaker than I thought: don’t do that work anymore and get rid of those jobs. Not long after I was gone, that company let the lease end and moved to a crappy hot-desking space 30 miles straight across town. If you worked with hardware that didn’t fit on your desk, you were probably looking for a new job.

    I should go see what that building is like these days. It’s a nice day for a long ride.

  21. What should GM do with the Renn Cen?

    There are a couple of options.

    One, go with the existing name and make it a dedicated Renaissance Festival venue – call it the Ren Fest Cen.

    Or two, we make use of the additional n in “Renn Cen” and turn it into a racing park. Rennen is the German word meaning ‘to run’ or ‘to race’; ‘Rennsport’ basically means ‘motorsport’. There would be enough room to have basic, mid, and posh levels of racing for electric karts, quads, minibikes, etc. along with various tiers of concessions. Want to have a kid’s birthday party? Basic level. Want to have a business event with high-end catering? Posh level.

  24. Given there are more than 300,000 Muslims is the greater Detroit/Dearborn area, perhaps a grand mosque is in order. Or a shopping mall, whatever.

  25. I wonder if OCP is looking to move to a new building?

    I heard the board of directors considers their current boardroom haunted after the ED-209 incident.

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