Why CEO making $39.5M abruptly quit Stellantis
Carlos Tavares oversaw hellish slide of company that builds Jeep, Ram, Chrysler, Dodge, Fiat
Carlos Tavares finally gave up.
Tavares is the $39.5 million CEO of Stellantis who saw a 56% compensation bonus in 2023. It was an eye-popping amount by any standard in an industry reeling with challenges. But the one-time Wall Street darling watched his personal stock plummet as well as company stock over the last 11 months.
U.S. car dealers pleaded with the parent company of Jeep, Ram, Chrysler and Dodge to do something stat. Unpurchased vehicles filled up car lots. Sales continued to shrink. Market share dropped. Hourly workers protested. Factories shuttered. Salaried workers saw job cuts.
No one could take it anymore, including Tavares.
Thing is, corporate executives rarely leave without a massive golden parachute.
When Ford ousted CEO Mark Fields, he went from a $22 million pay package in 2016 to an exit package in 2017 valued at more than $50 million in cash, stock and pension benefits. Stock dropped more than 35% over three years under his leadership.
Stellantis refused to buy out Tavares’ contract.
On Sunday, Dec. 1, 2024, the Stellantis Board of Directors under chairman John Elkann announced they had accepted his resignation. A dramatic turn of events.
Two months ago, the automaker announced his retirement in early 2026.
“Tavares had more than a year left on his contract and the work was never going to get easier,” Sam Fiorani, vice president of global vehicle forecasting at AutoForecast Solutions in Chester Springs, Penn., said late Sunday.
“Brands need to go and he gave them a decade to let them find their niche, but they need to be consolidated much sooner,” Fiorani told me. “That might also mean closing plants. Stock price for Stellantis wasn't going to recover and much of the CEO's compensation is based on stock price.”
In the end, it came down to massive money loss for everyone.
Who is Carlos Tavares?
Tavares, 66, is a Portuguese race car driver who has finished more than 500 endurance competitions, including the brutal 24 Hours of Le Mans. No one could figure out why every quarterly earnings report this year has been worse than the previous one.
In October, a Stellantis spokesperson told me after mid-October meetings in Auburn Hills, Mich., “We had a productive meeting with our National Dealer Council this week. We continue to work together to ensure our collective success, which starts and ends with delivering head-turning products that meets the demand of our customers."
A dealer in the Midwest told me, “I don’t think Jeep and Ram brands are going to go away but who knows about the other brands.”
CEO gets attention of Donald Trump
Tavares — who has led Stellantis since January 2021, after the merger of PSA Group and Fiat Chrysler Automobile — made headlines for a pay package in 2023 that averaged 518 times that of the average Stellantis employee, according to regulatory filings.
He was showered in 2023 with money for meeting executive milestones tied to challenges the industry is facing on global mobility, technology and electric vehicles, Reuters reported at the time.
But things turned ugly.
He would then go on to launch a very public fight with UAW President Shawn Fain with threats to move jobs to Mexico. In early November, President-elect Donald Trump held a rally in Michigan and vowed 100% tariffs on Stellantis if it made good on the threat.
Stellantis watches things crumble
While all three Detroit automakers build vehicles in Mexico, only Stellentis has explicitly weaponized plant location during public conflicts with its union. The UAW accused the automaker of breaking its collective bargaining contract reached after a costly strike in 2023 — and warned of a potential nationwide walkout in 2024.
Then Stellantis filed multiple lawsuits against the UAW for threatening a strike over company delays in planned investments. Multiple units in different parts of the country requested strike authorization votes.
The Tavares exit is the byproduct of a perfect storm: Loss of hundreds of millions of dollars in corporate profits, car dealer profits, shareholder value and legal costs. Stellantis filed multiple lawsuits against suppliers this year.
Perhaps the most shocking data point: Market share.
Motor Intelligence data from the first nine months of 2023 compared to the first nine months of 2024 illustrated that something toxic was happening at Stellantis:
Stellantis dropped from 10.2% to 8.4%
Toyota grew from 13.9% to 14.6%
Ford grew from 12.8% to 13%
Honda grew from 8.3% to 8.9%
General Motor dipped from 16.7% to 16.4%
Agnelli: The big name behind big decisions
A national dealer who sells multiple brands, including Stellantis, told me prior to the resignation, “Dealers are completely frustrated and talking about going to the Agnelli family.”
The Agnelli family is known as Italy’s industrial royalty, having shaped its global business and culture, Spear’s magazine wrote in September 2024. “Through their control of Fiat, Italy's largest car manufacturer, and investments in Ferrari, Juventus football club, luxury brands and national newspapers, the family have amassed a $13.5 billion fortune.”
John Elkann, 48, chairman of the board that accepted the Tavares resignation, is the grandson of Gianni Agnelli and has led the Italian industrial dynasty that runs multiple companies since 2004, after the patriarch’s death.
Elkann, born in New York to a journalist father, is now CEO of Exor, which owns Ferrari, Christian Louboutin luxury footwear, The Economist Group (that publishes the newspaper and magazine), Phillips healthcare equipment maker and Iveco commercial trucks. (Elkann is also a competitive long-distance sailor, having raced the brutal Transpac from Los Angeles to Honolulu.)
He oversaw deals including FIAT's 2009 acquisition of a stake in Chrysler and its merger with Peugeot in January 2021 to form Stellantis, Forbes noted. “The family dynasty began in 1899 when Giovanni Agnelli, John Elkann's great-great-grandfather, founded FIAT in the northern Italian city of Turin.”
A year ago, the Italian financial newspaper Il Sole 24 Ore and other media outlets reported that Elkann was tightening his grip on family holdings, including Stellantis.
The Tavares honeymoon wouldn’t last.
Dealers watch ‘absolute disaster’
Stellantis has shuffled, reshuffled and said goodbye to many top executives over the past year. Change isn’t unusual at automakers, especially these days.
But the situation at Stellantis appears to have been unusual.
“Dealer profitability is at an all-time low. Suppliers hate dealing with the company. Banks don’t like it. Nobody likes dealing with Stellantis now,” one of its most loyal dealers in the U.S. told me. “Our inventories are a train wreck. Everybody is buried in aged inventory. The only way to get rid of it is to lose their ass.”
Dealers in Michigan, Ohio, Florida and Indiana have talked about sales staff leaving to work for more profitable competitors.
“We’re losing people to other manufacturers because nobody is making any money,” a Midwest dealer told me. “If you’re a stand-alone Stellantis dealer right now, tis challenging. They have to lean on service repairs and used cars. That’s how they’re surviving.”
Car dealers discuss privately a very real fear triggered not by the strength of the economy but tragic decisions involving product plans, schedules and designs made by Carlos Tavares.
A Stellantis dealer told me, “My new car sales are an absolute disaster.”
Toyota, Ford, GM steal customers
Car shoppers in the Midwest are sending a message with their feet.
They’ve walked away from Jeep, Ram Truck, Chrysler and Dodge car dealers — whose vehicles are piled up on lots because buyers aren’t buying.
Cold weather is here and now old vehicles are covered in snow.
The optics are bad. The reality is bad, too.
A dealer told me that longtime customers are so tired of waiting for high prices to drop on Jeep and Ram Truck products, specifically, that people are actually seeking advice about which competitor to shop.
“We’re easily $10,000 higher than we should be,” the dealer said. “We can’t get Stellantis to budget on incentives for customers. Prices aren’t competitive.”
Anyone who hops online to price compare sees the reality.
“I have sent people to Toyota for the RAV4, along with Ford for Bronco for F-150,” a Stellantis dealer told me. “We haven’t been competitive for months. People are tired of waiting. Meanwhile, we’re headed into Christmas with some guys worried about whether they’ll make it to 2025. We’re losing sales every day.”
Pickup trucks generate enormous profits for automakers.
Men and women who depend on sales commissions are leaving, too.
“It’s awful to see but I understand,” said the owner of a Stellantis dealership in the Great Lakes region after a grim third quarter earnings report that showed a 27% drop in net revenue from the same period in 2023. “This situation is a shit show. We’re all waiting for Carlos Tavares to get fired. We can’t figure out what’s taking so long.”
Well, it finally happened.
The stock price — at $18.09 on Dec. 31, 2020 (immediately) prior to Tavares’ hiring — reached a high of $29.18 on March 22, 2024 and has steadily dropped since then to $13.20 on Friday, Nov. 29, 2024.
So the CEO resignation dovetailed the $13.20 stock price.
In a news release, Stellantis promised to appoint a new CEO in the first half of 2025. An interim executive committee will be headed by Elkann.
“The stock price crash this year is just a sign of the extremely difficult job the CEO of Stellantis has, attempting to merge all of the parts of these companies into one profitable automaker,” Fiorani said. “There are many tough decisions … that need to be made.”
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Thanks for the good article. I worked for Chrysler from 2017 through 2021. Tavares was in an unfortunate position of not being an engineer, and also not having the personality of Sergio Marchionne. People worshiped Sergio. Nobody who followed Sergio would have had an easy road, but Tavares was standoffish. He visited us at CTC once during a wild wheels event that we held for the employees. It was outdoors, because it was still during the pandemic. Tavares spoke to nobody who wore a UAW uniform. He spoke only to other executives.
It’s sad the dealers don’t have the courage to speak on the record.
This is long overdue. There is going to be some serious unwinding with a dose of everybody’s favorite “Creative Destruction”. As a lifelong Detroiter, the struggles of the industry are normal, but the Stellantis story is particularly difficult.