Fiscal 2011 has come to a close across the global automotive industry, and that means financial reports are being released. Italian automaker Fiat released its regulatory filing Thursday, and the Detroit Free Press notes that CEO Sergio Marchionne was paid $18.9 million in salary and incentives for the year. The sum stands in stark contrast to what Marchionne was paid for his work as the CEO of Chrysler in 2011, which was nothing because Chrysler accepted auto bailout funds from the U.S. government.
Marchionne received salary and stock options
Fiat, which owns 58.5 percent of Chrysler, revealed that Sergio Marchionne’s executive salary was $3.2 million, which in itself did not rank among the industry’s most highly paid executives. Marchionne’s stock options outpaced his salary considerably at $15.68 million.
Marketing professor Dr. Giuliano Noci of Italy’s Milan Polytechnic told Bloomberg that Sergio Marchionne’s compensation is commensurate with company risk.
“Marchionne’s salary is in line with the industry’s top managers, and he shares company’s risk with the stock payment,” said Noci. “Industrywide speaking, the difference between top managers’ salary and workers is impressive.”
Bloomberg reports that Fiat will grant Sergio Marchionne stock awards in excess of 7 million shares. This was confirmed by the automaker on Feb. 22, 2012. These stock grants can be exercised by Marchionne any time between 2012 and 2015. Each year that he remains the CEO of Fiat, Marchionne will receive one-third of the shares, with the final payment made on Feb. 22, 2015, if Marchionne is still in the post.
Sources indicate that Sergio Marchionne’s fiscal 2011 salary as chairman of Fiat Industrial SpA, a construction equipment and truck company, has not yet been revealed.
Emerging from the shadow of Chapter 11
Concern over public perception prompted Marchionne not to seek compensation from Chrysler in 2011. As Chrysler is still on the mend from its Chapter 11 bankruptcy filing in June 2009 and was the recipient of loans from both the U.S. and Canadian governments, it avoided making payment. The company could have legally paid Marchionne, as it has repaid its government loans, but it chose not to do so.