Welcome to the Daily 5 report for Friday, Feb. 28.
Automakers are no different from the rest of corporate America in that they reward CEOs who succeed with lucrative compensation packages but later pay the price for their failures. The issue emerged in the auto industry this week as three global automakers — Stellantis, Nissan Motor Co. and Lucid Motors — grapple with the departure or expected departure of their chief executives.
Former Stellantis CEO Carlos Tavares was rewarded handsomely for his perceived success in 2023 when he won a 56 percent boost in compensation to $39.5 million — far more than General Motors CEO Mary Barra and Ford Motor Co. CEO Jim Farley. Shares in Stellantis more than doubled early in 2024 to as much as $29.
But Tavares by almost any measure failed in 2024, leading to his early departure in December. The shares plunged to about $13. Stellantis Chairman John Elkann and his subordinates are now trying to mend fences with dealers, shareholders, unions and suppliers. Elkann promised to hire a new CEO by the middle of the year.
Still, Tavares managed to collect $24 million for his work in 2024, Reuters reported today, and he gets $2.1 million in severance and $10.4 million in bonus pay this year for meeting company milestones.
At Lucid, CEO Peter Rawlinson qualified for $379 million in compensation, most of it from stock grants, during the good times in 2022 when the company's shares traded north of $50. His compensation was 11 times more than Barra and Farley for running a company a fraction of the size.
This week, Rawlinson, 67, announced he's stepping down from the luxury EV producer after it hemorrhaged $397 million in the fourth quarter. Shares in Lucid since 2022 have plummeted to about $2.25. But Rawlinson isn't going away entirely over the next two years, as our Laurence Iliff reports. He gets a $2 million stock grant and $120,000 a month to be an adviser. And he gets a free car and health insurance.
It remains cloudy how much Tavares and Rawlinson will clear from their once-lucrative stock grants and options after the companies' stock prices tanked. Typically, it depends on when those options vest and when they are exercised.
It's too early to tell what Nissan CEO Makoto Uchida would get if he departs in the coming weeks, as many news outlets are reporting. Our story today by Hans Greimel quotes a Japanese media report saying CFO Jeremie Papin, the former head of Nissan North America, could serve as interim CEO.
Meanwhile, 42 dealerships in California owned by AutoNation Inc. — the nation's No. 2 dealership group, run by another former top Stellantis executive, Mike Manley — have agreed to pay $650,000 to settle allegations they violated laws relating to the timely transfer of registration and ownership of used cars, according to Mark Hollmer's story.
AutoNation said in a statement: "While we regret any delay, many of these delays occurred as a result of COVID-19 pandemic challenges or for other reasons outside a dealership's control."
Finally, our report includes this comprehensive look at GM's electric vehicle strategy from Reuters. Analysts are saying the automaker may finally be gaining traction in its EV strategies. GM's fourth-quarter share of U.S. EVs hit 12 percent — double a year earlier and second only to Tesla at 44.4 percent, according to Cox Automotive.
"We've got the broadest lineup out there, and we definitely have momentum," GM global markets chief Rory Harvey told Reuters. "And we all know that the automotive industry is a momentum game."
We're expecting February U.S. auto sales results to start coming in early tomorrow and on Monday. We'll be taking a close look at monthly reports from Hyundai, Kia, Toyota, Honda and Ford, among others. But as usual, we won't get the full picture until first-quarter results come out in another month.
That's it for today. Have a great weekend.
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— Philip Nussel, online editor
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