Fiat Chrysler Automobiles Chief Executive Sergio Marchionne made salary
and stock awards worth $307,989 last year for heading Chrysler Group
LLC, according to a filing with U.S. regulators by the American
automaker on Friday.
In a statement, Marchionne called the buyout a defining moment for the
Fiat shares, which fell about 13 percent last week, dropped almost 1
percent at 7.46 euros in trading in Milan on Monday.
Marchionne’s compensation from Chrysler in 2013 was down from the
previous year, which totaled $1.23 million. In 2011, he declined a
salary from the American automaker.
Sergio Marchionne, chief executive officer of Italian parent Fiat SpA as
well as Chrysler, did not participate in the analysts’ conference call
after Chrysler reported a $690 million loss in the first quarter.
Marchionne, 61, was the CEO of both companies before the merger.
Marchionne, who has run both automakers since Chrysler’s 2009 U.S.
government-funded bankruptcy restructuring, aims to merge Fiat and
Chrysler into the world’s seventh-largest auto group.
The redesigned Chrysler 200 is built at a suburban Detroit plant that
was slated for closure in 2009 but was recently upgraded at a cost of $1
billion. Critics have said it is a vast improvement over the outgoing
Chrysler 200, whose sales were less than one-third of the midsize sedan
leader, Toyota Motor Corp’s Camry last year.
The VEBA’s payout is less rich than some analysts expected. The sale of
the UAW trust’s stake values the No. 3 U.S. automaker at less than $9
billion. When factoring in the additional $700 million, Chrysler is
worth $10.5 billion.
Chrysler, the No. 3 U.S. automaker, said the loss was due to charges
related to the merger of the two companies.
Fiat SpA, based in Italy, and Chrysler Group LLC, headquartered in
Michigan, were merged in January. The newly formed company is to be
traded primarily in New York, as well as in Milan, beginning later this
Fiat will acquire the 41.46 percent stake in Chrysler it did not already
own from a retiree healthcare trust affiliated with the United Auto
Workers union. The trust, known as a voluntary employee beneficiary
association or VEBA, will receive $3.65 billion in cash for the stake,
$1.9 billion of which will come from Chrysler and $1.75 billion from
Fiat. After the deal closes, Chrysler has committed to giving the UAW
trust another $700 million over three years.
Chrysler took a $504 million non-cash charge on payments to retire a
note linked to a union healthcare trust that was the company’s minority
owner until January and a $672 million charge for payments to the United
Auto Workers retiree healthcare trust in the United States.
Marchionne’s Chrysler pay is expected to be a fraction of his total
compensation once the Fiat side of the business announces his
compensation. Marchionne’s compensation from Fiat for 2013 will be
announced later this month.
But he has been at odds over the U.S. automaker’s worth with the trust,
which was pushing for a payout of more than $5 billion. In September,
the trust exercised an option enshrined in bankruptcy documents to force
Chrysler to file for an initial public offering.
Excluding the items, Chrysler posted a profit of $486 million, up from
$166 million a year earlier.
The drop in pay last year for Marchionne and other top Chrysler
executives is because the 2012 compensation included performance
incentives accrued over three years./
“This is an increasingly American company now, because in Europe, and
especially in Italy, the business conditions remain difficult,” said
Andrea Giuricin, transport analyst at Milan’s Bicocca University. “Fiat
has already lost many of its market positions in Europe and it won’t be
easy to recover that.”
Chrysler Group maintained a 2014 forecast for earnings of between $2.3
billion and $2.5 billion, excluding special items, on net revenue of
about $80 billion.