Filed under: GM, Earnings/Financials
Wagoner cuts pay by 25% to aid turnaround, well kind of
When possible, we like to cross-reference stories with other news sources before we report on them, and we've found this to be even more important when the topic at hand is hard data. When we came across a Reuters' story proclaiming that GM CEO Rick Wagoner was taking a 25-percent pay cut beginning in March of this year, a quick search of Google News revealed that, depending on the source, there could be a $370,000 discrepancy – and a possible raise for Wagoner.
[Sources: Bloomberg, Detroit Free Press, Detroit News, GM, Reuters]
According to Reuters, Wagoner earned $2.2 million in January of 2006, but in an effort to aid in GM's turnaround, his salary has been reduced to $1.65 million beginning this month. Bloomberg and the Freep go into more detail, outlining all of the General's CEO's earnings, including $765,566 in "other compensation," plus stock options and "awards" that added an additional $6.67 million to his income. Wagoner's grand total for 2006: $10.2 million.
Running over to GM's corporate website, we were able to confirm those figures to a certain degree (see pic below), with Wagoner earning $1,283,333 in salary, stock awards totaling $3,574,594, option awards to the tune of $3,095,560, pension value changes of $1,468,100, plus $769,566 in "all other compensation." All that totals up to be $10,191,153 earned by Wagoner in 2006 (not quite $10.2M, but whatev).
Now, regardless of the faulty math, the question remains, what kind of salary cut did Wagoner really end up with? According to Bloomberg, the CEO took a voluntary pay cut of 50-percent in February of 2006 (in actuality it was 42-percent) – down from $2.2 million in 2005 to $1.28 million in 2006. Now, Wagoner's salary beginning in March of this year will be $1.65 million – or a 28-percent raise.
So, at the end of the day, did Wagoner receive a pay cut from last year's earnings or 2005's? We're a little unsure ourselves, but that's what we have.
Click to enlarge or follow the GM link above under "Sources" to download the .PDF.
Reader Comments (Page 1 of 1)
Avinash machado 11:51AM (4/28/2007)
It is fair that the CEO also takes a cut in pay. Why should only the employees have to take a cut? This could also help in bargaining with the unions.
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Petey 11:52AM (4/28/2007)
This is sick.. Mulally gets 35+ million, 10+ million for Wagoneer, and Toyota's CEO gets a bit over 1 million... only in America.
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Rastus 1:00PM (4/28/2007)
Yep...I agree.
Wagoner ought to be out sweeping gutters. It's funny how he is in the process of "turning GM around"...when in fact he was a BIG part of the problem to BEGIN with!!!
Bean-counting execs with no lust (or even a real interest) in their products.
Run a company into the ground...and then get paid to "turn it around".
Lovely.
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Steve 2:00PM (4/28/2007)
I wish the top dogs in major corporations had salaries that were more in line with their employees. These disparities make for terrible relationships... but I'd have a hard time turning down $10 million if it was offered to me.
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vwwwwwwwww 2:10PM (4/28/2007)
someone have a link with the exact toyota CEO salary?
In japan, execs don't make the mega salaries like here.
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Stéphane Dumas 2:46PM (4/28/2007)
"someone have a link with the exact toyota CEO salary?"
It would be nice to see it as well as the CEOs of Mitsubishi, Mazda, Nissan and Honda and come to think of it, the salaries of the CEOs of Renault, Fiat, Peugeot, BMW and VW ;-)
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Duck 3:55PM (4/28/2007)
#5
http://www.manifest.co.uk/news/2004/20040510Forbes.htm
This is from an excerpt from an article in WSJ:
"Toyota is about to become the number one car company," Mr Hodgson said, and although there is no detailed information about Japanese compensation packages, "the entire board and executive team at Toyota doesn't earn as much as a single American executive at General Motors."
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NeoteriX 6:44PM (4/28/2007)
Wagoner needs to slash his check to half a mil and then start talking. When you compare it with the Toyota figures, it's just plain embarrassing.
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Mike G 7:23PM (4/28/2007)
"I want everyone to know that I feel your pain and so I'm taking a pay cut of...well, I'm getting paid more, actually, but um at least the company lost it's number one spot in the world after 77 years! That counts for something, right?"
- Dick Wagger
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Chris 6:02AM (4/29/2007)
I will probably get flamed for this but I would like to see a comparison of the salaries of the top 50 Japanese companies and the top 50 western companies.
I think that if you compare the salaries of the big three execs to the salaries of other american (and european) executives to the top US companies it would shed some light on why they get paid what they do.
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CF 10:24AM (4/29/2007)
Yes, Rick Wagoner makes too much money. I have no idea what the foreign auto manufacturer's executives make, but it's really irrelevant considering that all of them are doing the exact same thing--following the money. Why are the Japanese so excited about becoming the number one auto manufacturer in the U.S.? The answer: more money. Obviously, they're not making as much money in Japan and other markets, or they wouldn't be focusing on the U.S. market. It's hypocritical to condemn Rick Wagoner for this when most people would do the same when presented with this situation.
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roadside observer 3:19PM (4/30/2007)
People like to state that Rick Wagoner was paid $10.6 million in 2006 and make a big deal over it. The fact remains, though, that Rick was *not* paid $10.6 million. The lion's share of his pay was in stock options and awards which have a strike price. If the price of the stock falls below the strike price, the options are worthless - and hence he would never see a penny from them.
Further, in many cases these options and awards have a vesting period, often three years or more - so even if he could make money on the options, he'd have to wait three years to do it.
A similar situation exists for Alan Mullaly.
It would be nice if people would read the fine print before deciding to lynch Rick(or anyone else). Simply saying that "Rick Wagoner made $10.6 million in 2006" is an exercise for simple-minded people.
BTW, this is not a defense of his pay package, only an explanation. In no way do I justify it.
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Lithous 9:59PM (4/30/2007)
Ratsass,
Tell Farrago to slow down the physical relationship with his, um, buddy, Frank and rekindle the listening part of their relationship. For some reason, Farrago, you and the rest of the lemmings didn't read Franks comments (or someone over there would have called out Farrago). I guess you guys need to unplug the orifices and pay attention.
I know wait, it is because no one is allowed to call Farrago out. Sorry, I forgot.
In Farrago's latest about Wagoner he states that Toyota passed GM in U.S. retail sales in 2005.
http://www.thetruthaboutcars.com/?p=3613
So how in the F did GM pull more than 300K RETAIL units ahead for the RECENT 6 months up until February (according to spanky Franky)?
http://www.thetruthaboutcars.com/?p=3598&cp=3#comment-47267
I cannot believe that Mr. Ratsass Richard Gozinya would allow such contradictions to occur without calling the person out. Please Ratsass, explain how a couple years ago Toyota passed GM in U.S. retail but now (according to Spanky boy) they are 300K retails sales behind GM?
BTW, most people are in favor of the CEOs and assemblers and engineers to get paid in stock so that they lose if the company loses. I see a lot of the compensation listed for Wagoner in stock. Gee, what happened to all the people who think that is a great idea? They certainly aren't chiming up about how much compensation is stock.
Do we know how much stock, geishas and whatever else the Japanese execs get? I'm sure Bill Gates made a tiny salary compared to stock many times. The way the Japanese operate, no one here will no their exact compensation. So all these comparisons are dumb.
To be fair, Watanabe deserves more than Wagoner. Anyone who can keep the company running without a hickup while producing millions of sludge-matic engines deserves something. Although, to be fair, American test scores aren't what they used to be so the task of selling snake oil to most Americans really isn't too terribly difficult.
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Lithous 10:06PM (4/30/2007)
That is without a hickup or a hiccup :)
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