Carlos Tavares and the Fragility of CEOs’ Reputations
May 2024, Stellantis reports exceptional results for the third consecutive year. With a double-digit operating margin comparable to that of BMW and Mercedes, a mainstream automaker now matching the performance of premium brands. Carlos Tavares is prominently featured across the media, engaging in a series of laudatory interviews. Five months later, the announcement of his departure in 2026 – coinciding with the opening of the 2024 Paris Motor Show – is now causing a major stir amid a sector-wide crisis. One should examine the causes of this reversal, which illustrates the fragility of CEOs’ reputations.
Coming from historic competitor Renault, Carlos Tavares took the helm of PSA Group in 2014 and saved it from bankruptcy. In 2017, he acquired Opel from General Motors and turned around a company that had been perpetually loss-making since its acquisition by the American giant—in just one year. In 2021, he successfully merged with Fiat Chrysler Automobiles, achieving immediate success: record profits of €16 billion in 2022 and €18 billion in 2023. This was unprecedented in an automotive industry significantly affected by the COVID crisis and subsequent order delays. The Portuguese CEO’s relentless cost-cutting strategy bore fruit, reassuring the group’s shareholders—now overseeing 242,000 employees worldwide. Emboldened by these excellent results, Tavares openly embraced his extreme rigor in his communications, even describing himself as a “performance psychopath.”
However, this exceptional aura began to fade in 2024, unfolding in three key developments.
First, a massive vehicle recalls by Citroën raised questions about the quality of the group’s products, with the press starting to echo what customers were increasingly pointing out. Commercially, Tavares’s strategy of cutting costs and raising prices led to a drop in sales once the COVID-related shortages subsided, particularly in the United States where the group suffered from an aging model lineup. Concurrently with the release of the 2023 results, media coverage of his salary sparked intense controversy in France. Did the top executive, dubbed the “Mbappé of the automotive industry” by former MEDEF President Geoffroy Roux de Bézieux, deserve his income exceeding €36 million (excluding bonuses)? President Emmanuel Macron had already answered “No,” deeming Tavares’s compensation—€19 million in 2021 and €23 million in 2022—as “shocking and excessive” during the presidential campaign.
“It’s a contractual matter between the company and me. Like a footballer or a Formula 1 driver, there’s a contract,” Tavares defended himself, appealing to public opinion. “If you believe it’s unacceptable, then pass a law and I’ll comply,” he concluded. His communication was terse, cold, and emotionless—the quintessential Tavares style: assertive and provocative. However, such a communication strategy works only as long as performance follows suit.
The announcement of a return to standard automotive sector margins for 2024 sent the group’s stock plummeting, necessitating a prompt response. Known for his managerial harshness, Tavares did not hesitate to sacrifice his executive committee. This did not prevent the Board of Directors from approving his upcoming retirement.
After completely transforming the company and being hailed at the highest levels, Carlos Tavares now risks leaving his position with a significantly tarnished image. The relentless focus on results without sufficient investment in societal and social aspects, along with intense media exposure in recent years, works only as long as results are improving. Their abrupt decline has just as abruptly reversed perceptions and shattered his image.
Although his approach and communication style were very different, Emmanuel Faber, then CEO of Danone, had a similarly bitter experience. Overexposed CEOs are paradoxically vulnerable during periods of declining results.
We can therefore draw two conclusions in terms of communication: major CEOs should avoid over-publicizing their success and be wary of the negative effects of media overexposure. Their communication should adapt to all dimensions of the company, addressing every aspect without neglect.
Eric Giuily
President of CLAI
Eliot Granveau & Jacques Smith
Senior Consultants