DETROIT – The head of U.S. sales and the Ram truck brand for Fiat Chrysler Automobiles has filed a whistleblower lawsuit against the company, which he said had retaliated against him because he was cooperating with a U.S. government investigation into FCA’s sales reporting.
Reid Bigland, a 22-year veteran of the company and its predecessors who had, at times, been suggested as a possible CEO candidate, claims in the suit, originally filed in Oakland County Circuit Court, that the company withheld most of his 2018 compensation as punishment and intended to use it to pay fines.
His attorney, Deborah Gordon, declined to give the precise amount but said it was in the millions of dollars.
Bigland, who also serves as CEO of FCA Canada, said he “refused to become a scapegoat for defendants’ long-standing reporting practices which predated him by reporting the full scope of this information to the U.S. Securities and Exchange Commission.”
The sales issue came to light in 2016. The Detroit Free Press reported at the time that the FCA was under scrutiny by U.S. Justice Department and the Securities and Exchange Commission and that its “impressive sales streak of 75 months of consecutive sales gains actually ended in September 2013.”
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Bigland said in the suit that he had inherited the sales reporting methodology, which had been in place since the late 1980s, and that it was widely known, including by former CEO Sergio Marchionne, who died last year; and Chief Financial Officer Richard Palmer, from whom he had taken direction.
The suit said the methodology had no appreciable impact on investors. FCA said in 2016 it revised the practice, which apparently allowed dealers to report sales one month and “unwind” sales and return vehicles to their inventory.
Bigland said the SEC suggested he admit to wrongdoing in late 2018, but he declined to do so because “there was no wrongdoing.”
In January of this year, he provided a white paper about the sales reporting to the SEC.
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“When defendants received plaintiff’s white paper in January 2019, they became aware of the full scope of plaintiff’s participation in the SEC’s investigation and the position he was taking,” according to the suit, which was first reported by The Detroit News.
Bigland also said in the suit that a company compensation committee was concerned about the “recent sales of all his shares.” On March 8, Bigland was told he was the “only person” in the company who had sold all of his shares, according to the suit.
Interestingly, CEO Mike Manley was just reported to have sold $3.5 million in shares of the company following the announcement that FCA had proposed a 50-50 merger with French automaker Renault.
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Gordon, Bigland’s attorney, said Bigland’s performance has been excellent, and that in 2017, when the company recorded its highest profit ever, Bigland had played a significant role in the most profitable areas.
“His record is devoid of anything negative related to his performance,” Gordon said.
FCA issued a statement about the suit, which names FCA, FCA North America Holdings and FCA US as defendants:
“We note the lawsuit filed by Reid Bigland. His eligibility for incentive compensation – like that of all corporate officers – is subject to a determination by the Board of Directors’ compensation committee that he has satisfied the applicable company and personal performance conditions. Mr. Bigland’s eligibility for his award remains subject to that determination and completion of a board-level evaluation of issues that are the subject to governmental investigations (as previously disclosed by FCA) in which FCA continues to cooperate. Beyond that, it would be inappropriate to comment on ongoing litigation or internal compensation processes.”
Follow Eric D. Lawrence on Twitter: @_ericdlawrence.