Marchionne awarded €31.3m for 2014 FCA merger success
Fiat Chrysler Automobiles chief Sergio Marchionne received €31.3 million in 2014, including a €24.7 million bonus for leading the Fiat-Chrysler merger, according to the company's annual report.
Fiat Chrysler Automobiles paid chief executive Sergio Marchionne €31.3 million for 2014, the company’s annual report confirmed. The figure includes a €24.7 million one-off bonus for his role in completing the merger of Fiat and Chrysler, which created the world’s seventh-largest carmaker.
The €31.3 million total comprised a base salary of €2.5 million, annual performance incentives of €4 million, and other compensation to bring the fixed and variable pay to €6.6 million. The €24.7 million cash award was approved by FCA’s non-executive directors as recognition for Marchionne’s strategic role in the merger, which was finalised in 2014.
Further incentives and share awards
In addition to the 2014 compensation, Marchionne was granted 1.62 million restricted shares in FCA, subject to shareholder approval. At the time, these were valued at approximately €23 million. He is also due a further €12 million bonus, payable only when his mandate as CEO ends. These additional awards could bring his total compensation related to the merger and restructuring to nearly €60 million, depending on share price and the timing of his departure.
Role in FCA’s strategy and future plans
FCA’s board highlighted Marchionne’s central role in executing the new strategic direction and implementing the industrial plan. The annual report described him as instrumental in the group’s major strategic and financial results, particularly the creation of FCA and the value it delivered to shareholders, employees and other stakeholders. The board also noted that losing Marchionne or other key managers could have a material adverse effect on the group’s prospects and financial position.
Marchionne stated his intention to remain as CEO through to the end of FCA’s five-year plan, running to 2018, which included expansion of the Jeep and Alfa Romeo brands and the planned Ferrari spinoff. At the end of 2014, FCA shares had risen 61 percent over the year.
How Marchionne’s package compares
Marchionne’s 2014 compensation was unusually high for the sector. Reports noted it was more than double the sum paid to Ford’s Alan Mulally in 2011, a year when Mulally was credited with turning around Ford’s finances. Marchionne’s pay reflected the scale of the Fiat-Chrysler merger and the board’s view of his unique contribution to FCA’s transformation.
FCA’s 2014 annual report also disclosed that chairman John Elkann received €1.68 million, while former Ferrari chairman Luca Cordero di Montezemolo was paid €2.5 million for the year.
