Fiat will award two million free shares to chief executive officer Sergio Marchionne over 2009 and 2010 if he meets specific performance criteria, the company announced on Feb. 23.
The plan would award a total of up to eight million shares to Fiat's top management including the two million for Marchionne if they meet "predetermined performance targets," Fiat said.
After a spectacular comeback in recent years, Fiat has been hit hard along with the entire automotive sector by the global financial crisis and has had to revise downward its profit forecasts for 2009. The company forecasts underlying profit, a key indicator of industrial performance, at just over one billion euros (US$1.3 billion) in 2009, compared with 3.362 billion euros last year.
"The purpose of the new plan ... is to ensure the involvement and retention of individuals who are key to the group's continued development, aligning their interests with those of shareholders," Fiat said.
At the current trading price, two million Fiat shares would be worth more than seven million euros. The shares to be distributed have already been purchased by the group on the stock market, the communique said. The old incentive plan for Fiat executives, adopted in 2006, distributed stock options. The new plan is "based on performance criteria which are consistent with the current market environment," the statement said.
Copyright Agence France-Presse, 2009