The Italian car manufacturer Fiat has introduced an incentive plan for management, under which CEO Sergio Marchionne will be awarded two million shares during 2009 and 2010, provided he meets certain performance criteria.
According to Fiat’s statement, the group plans to allocate a total of eight million shares to management if they meet the set targets, including two million shares for Marchionne. After a spectacular recovery in recent years, Fiat, along with the entire automotive industry, has been severely affected by the global financial crisis and has been forced to revise its profit forecasts for 2009 downward.
In 2009, Fiat expects core earnings – a key performance indicator for the industry – to be just above one billion euros, compared to 3.362 billion euros achieved last year. “The purpose of the new incentive plan is to ensure the engagement of individuals critical to the continued development of the Fiat group, by aligning their interests with those of shareholders,” states Fiat’s announcement. At the current price, two million Fiat shares are worth more than seven million euros. The group has announced that it has already purchased the shares intended for the award on the stock exchange. (H)
