Chrysler CEO Sergio Marchionne led an overhaul of the company's staid lineup of cars and trucks and revived interest in the automaker that was once left for dead-- and he didn't get paid any cash for it.
The disclosure was revealed on Friday in a more than 300-page filing with U.S. securities regulators that offered a detailed first look at Chrysler's operations during its first full year under the Marchionne's leadership.
Marchionne, who is CEO of both Fiat SpA
The value of the stock in June 2009 was $600,000. That figure has ballooned to nearly $2.9 million based on a December 31 valuation of the company, according to Chrysler spokesman Gualberto Ranieri and the filing.
Based on the December valuation, each share of Chrysler has a value of $7.95, according to a footnote in the filing. Ranieri said this was the theoretical value of the company's stock because Chrysler is not yet public.
Marchionne has described 2011 as a year of execution for Chrysler as it lays the groundwork for an initial public offering the second half of the year and starts to sell its revamped lineup of cars and trucks.
According to the filing, Chrysler said its pension funds were underfunded by $4 billion and said its marketing costs in 2010 jumped to $1.7 billion from $677 million a year earlier.
Last year, about 36 percent of the company's U.S. sales were to fleet customers, such as businesses and rental car agencies, which are less profitable than sales to consumers.
In the filing, the company also revealed it has agreed to repurchase vehicles on dealer lots financed by Ally Financial upon certain triggering events. Chrysler said the maximum future payment to be made to Ally was $5.2 billion.
The SEC filing also listed a litany of risk factors to its business outlook that might hobble the recovery of Chrysler, which received a government bailout in 2009.
A possible failure to receive Department of Energy loans, and a jump in fuel and commodity prices are among the risks to business listed in the filing.
Marchionne has said one key aspect of Chrysler's recovery plan is receiving the DOE loans. But approval for the loans have taken longer than he expected.
The company applied for about $7 billion in Energy Department loans to retool its plants, but Chrysler said it expects the amount will be significantly less than the figure requested in the application.
Chrysler said its failure to qualify for DOE loans could hamper its investment in new and advanced technology and make its vehicles less competitive.
The company also said its outsized exposure to a jump in fuel prices could sap demand for its lineup and have a disproportionate effect on the company compared with its rivals.
Minivans, sport-utility vehicles and pick-up trucks made up nearly three-quarters of Chrysler's sales in 2010. These vehicles made up just more than half of overall U.S. sales in 2010, Chrysler said in the filing.
The company added it was particularly vulnerable to a jump in steel prices this year because two-thirds of its steel purchases last year were on fixed-price contracts.
Those contracts begin to expire in the middle of 2011, which means the company will be paying more for steel during a year in which it already expects commodity prices to shoot up.
Prices for aluminum and copper increased significantly in the fourth quarter of 2010, which we expect to impact our costs for those materials starting in 2011, the company said in a filing.
Earlier Friday, Ranieri said the company would begin filing annual, quarterly and periodic updates with the SEC as part of the company's effort to be more transparent. He said the decision was not linked to the IPO.
(Reporting by Deepa Seetharaman, editing by Matthew Lewis and Sofina Mirza-Reid)