By Eric Sylvers
Fiat Chrysler Automobiles NV Chief Executive Sergio Marchionne
earned a whopping $72.6 million in total pay last year--mostly from
bonuses and a stock award tied to Fiat's takeover of Chrysler that
led to a 61% jump in its share price.
His pay outstrips that of automotive chiefs in Europe and the
U.S., including the large $29.5 million pay package that former
Ford Motor Co. CEO Alan Mulally took home in 2011 for leading the
second-largest U.S. car maker through a turnaround.
The Canadian-Italian executive has led the auto maker for a
decade. Last year, he earned EUR6.6 million ($7 million) in salary
and incentives. On top of that, Mr. Marchionne received a EUR24.7
million bonus "as a recognition he was instrumental in major
strategic and financial accomplishments for the Group," according
to its annual report to shareholders filed on Thursday.
In addition to the large bonus, Mr. Marchionne will receive for
2014 a bonus of EUR12 million to be paid when he steps down as CEO
and 1.62 million shares that will vest once approved by the
company's shareholders at its annual meeting in April. Those shares
have a market value of almost EUR23 million at Friday's share
price.
Mr. Marchionne has said he intends to stay at Fiat Chrysler
through the completion of a five year operating plan that runs
through 2018.
A Fiat Chrysler spokesman declined to comment on Mr.
Marchionne's pay beyond the remarks in its annual report.
He begin 2014 with Fiat's acquisition of the 42% of Chrysler it
didn't already own and later in the year created Fiat Chrysler
Automobiles, a company registered in the Netherlands with its tax
domicile in London and primary stock market listing in New
York.
Mr. Marchionne last October disclosed plans for an initial share
sale and spinoff of Fiat Chrysler's 90% stake in sports car maker
Ferrari. Fiat Chrysler shares have jumped 85% since that
announcement, giving the company a market value of $25.84
billion.
While shares last year surged, operating results were hurt by
one time charges related to the Chrysler takeover. Fiat Chrysler's
net profit fell 68% to EUR632 million while revenue was up 11% to
EUR96.1 billion. Excluding some expenses including the Chrysler
purchase, net income would have been EUR955 million.
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 there. The auto maker's global shipments for the year rose
nearly 6% to 4.8 million vehicles.
The pay package outruns most executives. Median total direct
compensation for the CEO of the largest 500 companies in Europe
last year was about EUR3 million, according to management
consultancy Hay Group.
Among U.S. auto executives, Mary Barra, who became CEO of GM in
January last year, received a 2014 pay package of $14.4 million.
Ford hasn't yet said how much Mark Fields, who became CEO in July,
was paid for his work last year.
Large executive payouts are rare in Italy. 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.
John Elkann, Fiat Chrysler's 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.
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 NV, a maker of agriculture and
construction equipment that is also controlled by the Agnelli
family.
Write to Eric Sylvers at eric.sylvers@wsj.com
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