• Apr 26, 2008
GM has seen plenty of tough times over the past few years, and even the company's top executives have felt the pinch. Executive pay was among the items cut as the General waded through multi-billion-dollar losses and immense market pressure, but after two years of cuts, the members of GM's top brass are getting their old salaries back. Top boss Rick Wagoner's base pay went as "low" as $1.1M but is now back to its 2003 level of $2.2M. Product czar Bob Lutz and money man Fritz Henderson also had their pay restored, and Fritz even got a raise to reflect his promotion to COO. Many of the pay cuts were voluntary in recognition of GM's market struggles, but even with the cuts in base pay, overall executive pay packages are worth a lot more than just the salaries alone. Wagoner, for example, was paid $14.4M in 2007, while Maximum Bob came in at $6.9M.

[Source: Auto News (subs. req'd)]


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  • 44 Comments
      • 6 Years Ago
      I don't care who you are. Nobody is worth millions of dollars a year to a company other than the workers who create the product and are responsible for selling it.

      While there are creative CEOs 250k a year is more than enough for them to make. The pay disparity between the top and bottom is one of the biggest problems in America today.

      $35,000 isn't enough to live almost anywhere outside the ghetto. The median price of a home is far beyond the median income. While homes increased 85% over the past 8 years overall wages outside of the top 5% decreased. The top 5% increased by the largest ammount in the past 100 years. Clearly shown by the massive increase in billionares all around the world.

      Even if I had the ability to make $10 million a year as a salary at a company I wouldn't take it. If you add up all of the upper management at GM plus the pension plans the cost would far outweigh the salaries of the 20,000 people they fired.
        • 6 Years Ago
        So What !!!!!!!!!!!!!!!!!!!!!!!!
      • 6 Years Ago
      GM didn't fire 20,000--they offered buyouts to them. One of the reason's the company lost $30 billion dollars was because of legacy costs. The company needs to get ahold of them and I believe is doing so, in order to be competitive with companies like Toyota who don't have the hourly worker wages, the healthcare and pension costs that add several thousand dollars to the price of every GM vehicle. These are some of the tough questions a CEO like Wagoner has to deal with every day.
      • 6 Years Ago
      Good for them, they deserve every penny.
        • 6 Years Ago
        Yeah, they deserve to make more money in 1 year as someone making $100k makes in their whole life. Their job is definitely worth 1+ lifetime of work per year, as they get 1+ lifetime worth of work done each year, and make 1+ lifetime of contributions each year. Their work makes the engineers look like a bunch of lazy freeloading bums that live with you and eat all your food but won't get a job and pay rent. In fact, the engineers and machinists should pay THEM just for the privilege of working at such a desirable company.
        • 6 Years Ago
        Amen Yar. It's funny how people think it's easy to find a business leader with that kind of foresight. He's done so much for GM. For example:

        - Greenlighted cars like the Aztek, the Cobalt, the Colorado, the SSR, the GMs minivans, etc.

        - Formulated a product portfolio heavy on trucks and SUVs when gas costs $3.50/gal.

        - Didn't get caught up in that wacky hybrid sedan fad.

        - Oversaw the 2 billion dollar Fiat buyout fiasco. Investment screw-ups like that don't just fall out of the sky you know.

        - Decided to back e85, something Time reporter Michael Grunwald called a “clean energy scam” that is “dramatically accelerating global warming” and “imperiling the planet in the name of saving it.”

        On top of that, since GM only lost 39 billion dollars last year I don't see why they're not getting more.

        If you want to retain this type of talent then you gotta pay the big bucks. That's how the market works.
        • 6 Years Ago
        @mallory

        oh wow a time reporter!!! that's exactly where I get all my science news.
        • 6 Years Ago
        Hahaha, they more than likely took those pay cuts because if they didn't, the board of directors would've found other people.
        • 6 Years Ago
        Who the heck down-ranked me? Do people out there seriously believe that these men will work for FREE? CEO's don't control the whole world you know, if their skills weren't in demand then they wouldn't be earning such wages (keyword: EARNING). They took these pay cuts voluntarily because the fate of a company they loved was in the balance, and when they succeed in dodging the executioners ax people seem more fixated on how they're increasing their wages rather than how these men have secured thousands of jobs worldwide.
      • 6 Years Ago
      Now, they only need to deserve it.
      • 6 Years Ago
      I've always felt that CEO's shouldn't make any more than 75% of yearly salary the lowest paid (fulltime) worker for the company.

      So if GM's CEO's want $2 million salary, then the full-time janitor cleaning their office deserves $500k a year.

      So using that formula a full-time janitor (assuming that's the lowest paid position at GM) making 20k a year, the CEO's would be getting 80k a year.

      I'm not against CEO's having outrageous salaries, but not at the expense of laying off thousands workers.
        • 6 Years Ago
        Way off, and you didn't describe it right either.

        If the CEO's made 75% of the janitor's salary, they'd be making $375K ($500K x 0.75) since you wanted them making 75% of the lowest paid employee's salary.

        What you meant to say was they shouldn't be making more than 400% of the lowest paid employee. Therefore if they want $2million, the janitor gets $500K ($500K x 4.00) I know what you were trying to say, but you screwed it up royal.

        That said, the reason executives make what they do is supply and demand. Millions of workers could be a janitor, but maybe 1 in a million has what it takes to be a CEO(not to mention the education required), so the supply is significantly lower and the pay significantly higher.

        It's really not rocket science.
        • 6 Years Ago
        your math is off
      • 6 Years Ago
      The rich are getting richer, the poor are getting poorer.
        • 6 Years Ago
        So What !!!!!!!!!!!!!!!!!!!!
      • 6 Years Ago
      There's an awful lot of whining about the salaries of successful businessmen and how "unfair" it is compared to "hard working folks". There is noting stopping anyone from achieving success in this country. Stop whining and start working towards your own success.

        • 6 Years Ago
        Yes, everyone can be a big big star, and everyone can be a billionaire, you just can't give up your dream. The romantic fantasy of rags to riches is REAL! Believe! You too can have riches beyond your wildest dreams, just send $19.95 to ....
      • 6 Years Ago
      Many of the comments on here sound an awful lot like those "bitter" people Obama was talking about.

      If I were to base my comment solely on feelings relative to what I make per year, I could balk and cry how it's unfair that these guys make the kind of money they do per year... but if I look at it objectively, I can't do so.

      As others have mentioned... compared to many other executives across many different sectors, their pay isn't all that "ridiculous." I also look at a man like Lutz, who has spent decades of his life working up through the ranks of the automotive industry and now sits atop one of the largest corporations in the world... and I'm going to fault him for making the salary that he makes?

      I make no assumptions with regard to what these men do day to day, or what kind of hours they put in, or what kind of stress they must have to deal with in such public, highly scrutinized jobs. But the fact remains, they were both blessed and lucky to have worked in and up through an industry to where they can now command the salaries they do. People's salaries tend to be largely relative to what others make in a particular field... so how is their salary so ridiculous? Are we to assume that just because their fortunate enough to make what they do, that they somehow don't work for it, that they don't spend their days stressing over a company that they love and wish to see it succeed, that they spend all day doing absolutely nothing? Now that would be ridiculous...

      If we want to talk about ridiculous salaries... we should look at actors, musicians, and athletes. Why should Pitt/Clooney/Roberts make 10 million dollars for regurgitating lines in front of a camera? Why should Madonna/Jay-Z/Jagger make millions of dollars for singing into a microphone? Why should Brady/Schilling/Iverson make millions for throwing a ball and playing a game? None of those people have to worry about shareholders or hundreds of thousands of employees.

      So please... let's put things in just a little bit of perspective. People run a business to make money and some, if they work long and hard enough, are fortunate enough to get where they are like Wagoner and Lutz. It's just a little sad to see others whine and balk and try to detract from others just because they don't make as much money as someone else.
      • 6 Years Ago
      that's nothing to compare to what Wandelin Wiedeking receive from Porsche according to these French articles
      http://www.levif.be/belga/economie/78-2-45819/le-pdg-de-porsche--le-mieux-paye-des-patrons-du-secteur-automobile.html and at http://lapresseaffaires.cyberpresse.ca/article/20080421/LAINFORMER/80421018/5891/LAINFORMER01
      Wideking received 60M of Euros (it's around $95M CDN)
      • 6 Years Ago
      Now let's watch the UAW go nuts and call a strike.
      • 6 Years Ago
      looks like GM is counting their eggs before they hatch.

      so because GM came out with one decent car (the new Malibu) they think they are all of a sudden headed in the right direction and can afford to do this?
      • 6 Years Ago
      So you're suggesting that GM should be managed without Wagoner, Lutz and Henderson to save ~300 workers.
      Now lets try to find some top CEO that can and will manage GM for the salary of a line worker.
      Why not fix all salaries at $50k a year. This way no one is being jealous and everyone gets the same.
      Oh yes, I forgot, we already tried that. Isn't it called Communism? It works great, just ask the Russians.
        • 6 Years Ago
        "Mallory, and who is electing the board?"

        Great question. The way most boards work is the existing board members nominate the new members they want (rarely - usually they're all incumbents) then ask the shareholders to pick. The existing board even makes direct recommendations and tell the shareholders how they 'should' vote. This is where you get the inbred boards we have today. To see what I mean, pick any Fortune 100 company and look at who's on the board. Then go see what other boards these people are also on. What you'll find is that there's actually a small number of total board members because they all sit on each others boards, hence the 'you scratch my back, I'll scratch yours' type of problem rampant today. It's very similar to our political system in that you really can't just vote for whoever you want (well, technically you could write in someone but you know what I mean), you vote for the choices they give you whether you like those choices or not.

        With the degree of institutional ownership these days, unfortunately the voice of the small, independent shareholder is often times squelched.
        • 6 Years Ago
        @DKB_SATX, As far as I know GM is still a corporation and is not owned by its workers. Shareholders can do what they think is right for the company and increases profits. In this case they have agreed to pay this salaries.
        • 6 Years Ago
        Mallory, and who is electing the board?
        • 6 Years Ago
        sk - you have a very naive view of how businesses and boards actually function. You say:

        "Shareholders can do what they think is right for the company and increases profits. In this case they have agreed to pay this salaries."

        In theory the shareholders "own" the company but reality is that it's the board that sets compensation, many times in direct conflict with the wishes of the shareholders:

        http://hbswk.hbs.edu/item/5490.html

        Most US corporations have seen shareholder initiatives put forth that would give shareholders some control over executive compensation but every time you see the company vigorously fight to defeat it. The last thing a US corp wants is for the actual shareholders to get a voice in how the execs at their company are paid.
        • 6 Years Ago
        A ridiculous strawman argument. There's a vast gap between paying them the same as a line working and paying them 300x a line worker WHILE the company is losing money. Capitalism is about rewarding those who make good use of capital, not about throwing money at people who are mismanaging the company to the point that it LOSES money.
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