Magna made the special stock awards in a disappointing year in which the company’s profit dropped sharply and the share price tumbled
Magna valued the stock award to Mr. Kotagiri at US$15-million, making up more than half his 2022 compensation. But if Magna hits all the targets in the plan, culminating in a 200-per-cent gain in stock price, Mr. Kotagiri’s award will be worth just under US$94-million.
The recipients also must wait until 2027 to get the first half of their awards and 2028 and 2029 for the final installments, Magna says. The stock grants are “intended to transcend any inherent disincentives to bold action,” the company says. As Magna invests heavily in areas such as electrification and advanced driver assistance systems, it may “significantly reduce both short- and long-term compensation under the core executive compensation system.”
“Consistent with the experience of many other companies, Magna had to contend with macroeconomic, geopolitical and other disruptions which had a number of uncontrollable impacts on company performance in 2022,” Magna explained to shareholders. “Unfortunately, this was the third consecutive year of such disruptions and they were accompanied in 2022 by some controllable operational underperformance.
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