Clever Chrysler CEO Hidden Pay Trick
Sergio Marchionne has the best of two worlds as CEO of both Fiat and Chrysler, it must be nice. It was widely reported that, in 2011, Marchionne refused to accept a salary as the head of the Detroit automaker, one of many public relations coups that Chrysler has scored since it was bailed out of financial disaster by the U.S. government.It wasn’t reported as much, though, that Marchionne was rewarded with a $19 million (U.S.) compensation package from Fiat that same year. Many industry analysts are now noting that the decision to decline a paycheck from Chrysler was little more than a publicity stunt by Marchionne, who spearheaded Fiat’s takeover of Chrysler in 2009.
The salary issue is ironic considering Fiat’s failure to make a dent in the U.S. market last year, despite a massive marketing campaign that featured Jennifer Lopez driving a Fiat 500 Cabrio everywhere from her old stomping grounds in a fabricated Bronx to a glamorous performance at the 2011 Grammys. It was a complete flop, and Fiat dumped J.Lo in favor of harder-edged television spots anchored by Charlie Sheen and his bad-boy image.
On the other hand, Chrysler’s sales have remained fairly steady, and the automaker has been roundly applauded (criticized) for an advertising strategy that relies on gritty, patriotic commercials starring Clint Eastwood and music from Eminem. Chrysler’s Super Bowl ad was considered by many to be one of the best and most controversial ever.
It remains to be seen if there will be any blowback against Marchionne as consumers learn of the financial sleight of hand regarding his pay. It’s unlikely, considering the $19 million Fiat paid him last year is not even half the compensation of his main domestic rival, Ford CEO Alan Mulally. Mulally raked in a whopping $58.3 million in wages and company stock.
Perhaps auto executives around the world can learn a lesson from Marchionne’s business plan, except for the whole Jenny-from-the-block thing.
What do you think, clever accounting trick or out right douche?
Filed Under: Auto News