Wagoner gets a raise to what he made in 2003
After an abysmal 2005 where GM lost over $10 billion, CEO Rick Wagoner received a sizable pay cut from $2.2M to $1.28M. Yeah, we know, cry him freakin' river. The General's relative success of late, however, has convinced the board that Wagoner deserves to have his annual pay restored to the $2.2M he made from 2003-2005. While $2.2M is certainly a lot of coin, it's a drop in the bucket compared to what many CEOs are making these days.
GM is making up for Wagoner's meager pay by bolstering his portfolio with 165,000 shares, 500,000 stock options, and 75,000 restricted shares. If GM hits some pre-determined goals, the CEO will also receive up to $3.53 million in cash, and if GM shares hit $40 a share by 2012, the Duke grad will get an additional 500,000 stock options. With Wagoner's background in finance, we're sure he knows that all adds up to a nice chunk of change.
[Source: Automotive News, sub. req'd]
Reader Comments (Page 1 of 1)
Mark Graban 7:56AM (3/07/2008)
"Relative success." Great. Where is the leadership here? How do you look in the mirror and accept a pay raise after dumping on the UAW members to slash their hourly pay?
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Wally 8:16AM (3/07/2008)
Just think what he'd be making if he was a member of the Brotherhood of United Auto-CEO's Union....
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Kevin 9:06AM (3/07/2008)
it's sick what people like him get paid. I remember when the news reported Michigan State University President Lou Ann Simon, got a $100,000+ increase in her salary from like 300K to 400K, when tuition costs kept rising at that school, and also at lots of others, people are struggling to pay those tuition bills, it's sad.
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PJ 10:04AM (3/07/2008)
To put this in context, Wagoner is still making a pretty handsome living compared to most CEOs globally. The ratio of a company's CEO pay to its average worker's salary is around 300 to 1 in the US. In the UK and Europe, the ratio is more like 150 to 1 (can't remember the exact figures).
Considering that GM's laying off US employees left and right, and still isn't out of the woods product-wise, I think there's still some room for criticism.
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Dave 9:31PM (3/07/2008)
A 300:1 ratio of CEO pay to worker pay means that if Wagoner is making $2.2million, the average worker is making $7,333. Add in 165k shares at $22 each, and that raises CEO to $5.8 million and workers to $19,400. The rest of the pay (cash bonus and options) are only paid for performance.
Since I'm sure average pay for GM workers is closer to $40k than $20k, Wagoner is in fact making 150 times the average worker or less, with a substantial amount of pay tied to performance. I don't see a problem here.
Kaptain75329 12:30PM (3/07/2008)
Comments borne out of wealth envy would be far more entertaining if the United States wasn't already on a one-way ticket to hell in a handbasket courtesy of our inevitable march toward socialism. Enjoy it while you can Rick, there are lots of losers out there who want to steal from you because they believe they have the right to dictate what's an acceptable paycheck.
Even so, I'd say GM's made great progress over the last couple of years, but I don't know that I'd be ready to give Rick a pat on the back just yet - there's still much to do in the way of GM's comeback, and I'm really not thrilled with the apparent about face on Pontiac's restoration. For GM to be doing something right (The G8) and then back off (Alpha RWD platform practically shelved with all other Zetas) using CAFE as a lame excuse to do so, that doesn't exactly inspire confidence in the General. It lends credence to the notion that GM will ultimately go right back to bean-counting and design by committee. It's too soon to tell if GM has a series of one-hit wonders on it's hands, or if GM is really back. I'd much prefer the board take Mazda and Nissan's approach and wait until there's an actual sustainable pattern of success to justify giving Wangoner a raise. If nothing else, it would spare us the vitriol and jealousy from the public just a little longer.
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Polly Prissy Pants 8:43PM (3/07/2008)
Why do you assume it's envy or jealousy when people see something wrong with Wagoner making in one day what the guy building the cars makes all year? Who green-lighted the Aztek? The Colorado? The ill-fated Fuji deal that lost GM 3/4 of a billion dollars? The Fiat deal that cost them $2 billion? The Venture minivan? The list goes on. GM's historic woes are the fault of execs like Wagoner yet he gets millions while the guy trying to support a wife and two kids on $27/hour is put out on the street. Why? Because the boards are inbred and take care of their own, not because of some Ayn Rand-ian capitalist ideal. If the U.S. is going to Hell in a handcart is because of guys like this who corrupt and exploit the system that made this country what it is today.