Akio Toyoda Receives Unprecedented Compensation Despite Toyota's Falling Profits | Carscoops

      Toyota's consolidated operating profit dropped by 10% to 4.8 trillion yen for fiscal 2024, yet company chairman Akio Toyoda

      In a development that may surprise no one, the chairman of a major automotive company earns millions.

      However, Akio Toyoda’s pay is significantly lower than that of the CEOs of GM and Ford.

      Still, his salary is double that of the company's current CEO and president, Koji Sato.

      Although Akio Toyoda stepped down as CEO of Toyota over two years ago, he remains influential as chairman. Based on the latest fiscal data, he is certainly not lacking financially. For the fiscal year ending March 31, Toyoda earned 1.95 billion yen, which is roughly $13.5 million at current exchange rates, making him the highest-paid executive in Toyota’s history.

      His salary increased by 20% compared to the previous fiscal year, coinciding with Toyota's decision to align base compensation with global standards. Additionally, the automaker opted to eliminate individual performance evaluations for Toyoda and the president.

      The rise in Toyoda’s pay occurred despite the company’s consolidated operating profit decreasing by 10% to 4.8 trillion yen ($28 billion). Furthermore, costs at the world’s largest automaker rose, and production declined.

      For comparison, Koji Sato, the current CEO and president of Toyota, received a significantly lower compensation of 826 million yen ($5.67 million). To give a sense of how compensation stacks up in Toyota’s upper management, a regulatory filing reported by Nikkei Asia disclosed that at least seven senior executives, including a retired board member, were paid over 100 million yen (approximately $687,000) each.

      It's Good to Be the Boss

      While Toyoda’s salary may appear excessive by typical standards, it remains within industry norms. In fact, it is much less than that of some peers. For instance, GM’s Mary Barra received a total compensation of $29.5 million last year, while Ford's Jim Farley earned $24.9 million.

      Former Stellantis CEO Carlos Tavares received $23.9 million to lead the company in 2024 before resigning ahead of his contract's conclusion due to underperformance. His successor, Antonio Filosa, could earn as much as $10.2 million in his first year. Should Filosa succeed where Tavares did not, he likely won't feel undervalued during performance assessments by the board and shareholders.

      While CEOs in Detroit are earning substantial sums, their equivalents at other companies are also doing well financially. For example, VW CEO Oliver Blume earned around €10.35 million (approximately $11.8 million) last year, Hyundai’s Eusion Chung took home 11.5 billion won (about $8.8 million), and the Renault Group’s Luca de Meo, who is set to leave the company next month, received €5.5 million ($6.2 million).