By Eric Sylvers
Fiat Chrysler Automobiles Chief Executive Sergio Marchionne
earned 31.3 million euros ($34.6 million) in 2014--a giant package
compared with most European corporate chiefs--thanks to a one-off
bonus he received for engineering Fiat's full takeover of Chrysler
that created the world's seventh-largest car maker and helped fuel
a 61% surge in the stock price.
The payoff, disclosed in the annual report released Thursday, is
especially noteworthy for Europe, but is also higher than the
chiefs of U.S. auto giants Ford Motor Co. and General Motors
Co.
Mr. Marchionne, who has run Fiat Chrysler for a decade, last
year earned EUR2.5 million in salary and EUR4 million in annual
incentives. On top of that, nonexecutive directors gave Mr.
Marchionne a one-off bonus of EUR24.7 million "as a recognition he
was instrumental in major strategic and financial accomplishments
for the Group," Fiat Chrysler wrote in its annual report.
Mr. Marchionne, considered by many to be the consummate deal
maker in the auto industry, opened 2014 with Fiat's acquisition of
the 42% of Chrysler it didn't already own. A reorganization later
in the year created Fiat Chrysler Automobiles, a new company
registered in the Netherlands with its tax domicile in London and
primary stock market listing in New York.
In a move that surprised markets and led to a big jump in the
stock price, Mr. Marchionne in October announced an initial share
sale and spinoff of Fiat Chrysler's 90% stake in sports car maker
Ferrari. Fiat Chrysler shares have jumped 85% since the
announcement giving the company a market value of EUR23.8
billion.
While his deal making grabbed headlines last year, Mr.
Marchionne also oversaw a 68% drop in net profit. Operating profit
rose 3.7% and there were some bright spots including a small
operating profit in Europe in the last three months of the year
after 30 quarters of losses on the Continent.
Mary Barra, who became CEO of GM in January last year, received
a pay package in 2014 of $14.4 million. Ford hasn't said how much
Mark Fields, who became CEO in July, will get for his work last
year. His predecessor, Alan Mulally, took home $23.3 million in
2013 including salary, stock awards and bonuses.
The median total direct compensation for the CEO of the largest
500 companies in Europe last year was about EUR3 million, according
to research by management consultancy Hay Group.
Large executive payouts are particularly rare in Italy with
significant one-off payments normally only coming when an executive
steps down. Luca Cordero di Montezemolo received EUR15 million last
year after Mr. Marchionne forced him out as Ferrari chairman, a
post Mr. Marchionne took for himself.
Fiat Chrysler's statute allows nonexecutive directors to grant
periodic bonuses for specific transactions considered exceptional
for their strategic importance and effect on the company's
results.
In addition to the large one-off bonus, the nonexecutive
directors gave Mr. Marchionne another bonus of EUR12 million that
he will receive when he steps down as CEO as well as 1.62 million
shares that will vest as soon as that payout is approved by the
company's annual general meeting in April. Those shares have a
market value of almost 23 million euros.
The annual report also said John Elkann, the company chairman
and scion of the family that founded Fiat more than a century ago,
earned EUR1.7 million in salary and other compensation last year.
The Agnelli family owns 29% of Fiat through a holding company,
while Mr. Marchionne owns about 1% of the car maker, a stake that
grew last year as he exercised stock options.
Mr. Marchionne also received $2.5 million last year for his role
as chairman of CNH Industrial, a maker of agriculture and
construction equipment also controlled by the Agnelli family.
As of end-February, about 1,000 investors owning a total of 25%
of Fiat Chrysler's common shares were registered in the U.S.,
according to the annual report.
Write to Eric Sylvers at eric.sylvers@wsj.com
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