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Chrysler paying big bonuses to execs who stay
Executive bonuses are a hot-button issue in these difficult economic times, and for good reason. As companies in every industry teeter on the brink of bankruptcy, paying out millions in bonuses to execs is a breach of trust to those white- and blue-collar workers in the cheap seats who are being asked to sacrifice benefits, retirement security and even their jobs to keep a company solvent. The Detroit Free Press recently discovered that Chrysler LLC has an executive bonus plan in place that will cost the automaker about $30 million at the same time it's asking Congress for federal aid money to keep the lights on. Chrysler's executive vice president for human resources, Nancy Rae, who herself is on the receiving end of $1.6 million in bonus money, tells the Freep these bonuses were designed to keep executives in place after the automaker was sold by Daimler to private equity firm Cerberus. She goes on to say the bonus plan was established by Daimler, not Chrysler, to ease a potential buyer's fear that execs would flee after the sale. Be that as it may, considering how far Chrysler is from profitability at the moment, perhaps retaining these executives is the last thing it needs. Cutting loose the suits who are partially responsible for this mess and saving millions in the process seems like a more responsible move to us than begging Uncle Sam for bailout money.
[Source: The Detroit Free Press]
Reader Comments (Page 1 of 4)
Rboyett 8:33AM (11/14/2008)
Let them die. They just don't get it, so let them die.
Who needs executive bonuses for retention when executives should be happy to just have a job.
Reply
Hanoi Jane 9:26AM (11/14/2008)
30 million is not "THAT" bad for the team as a whole, Wagoner alone makes 17 Mil
I-man 4:36PM (11/14/2008)
"Let them die. They just don't get it, so let them die."
perfectly put.
2007RC46SP2 8:38AM (11/14/2008)
if they get a bailout the execs should have to have their pay cut to $100,000 a year or LESS.
Until the company becomes profitable again.
Reply
Mobius_1 10:03AM (11/14/2008)
That last sentence is probably not something the execs at Chrysler want to commit to and wait for...
happy_penguin 10:41AM (11/14/2008)
It's a hot mess but typical. Ask the dregs to take a pay cut and offer executive bonuses. Here's a thought, How about bringing EVERYONE'S pay level in line with the Japanese manufacturers? How about these assclowns show some initiative and leadership to encourage the union and the assemblers to do what's necessary? They obviously could give a rat's ass about the company. Pathetic.
DesiAuto 11:27AM (11/14/2008)
here is an example:
http://money.cnn.com/news/newsfeeds/articles/djf500/200811141042DOWJONESDJONLINE000617_FORTUNE5.htm
The supplemental-insurance company said Amos is forgoing about $13 million from severance compensation and another $13 million in change-in-control provisions.
--
There are plenty of people in Chrysler who can do the job of these so called "executives". I would actually PAY THEM TO LEAVE.
Landy 8:51AM (11/14/2008)
That is ecomomy for perverts!
Preaching water to the workers whlist drunk from wine.
I'm speachless...
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Shipey 8:55AM (11/14/2008)
I love Autobloggers... someone works their ass off to become a top exec, but because the company flounders as a whole they shouldn't be paid?
Please.
Think about where you work. If your company goes under, do you want them to say "Sorry, you're not getting paid. We need to keep the money for the company good." Even if it's true, it doesn't make it right. Its not your fault if top management or the economy has made the company fail. You earned your keep, worked hard, and should be paid the agreed sum.
The only difference here is that these folks earn big bucks, so most of us lowbies have no sympathy for them. I guarantee if the shoe was on the other foot you'd sing a different tune.
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LMBVette 9:18AM (11/14/2008)
Salary and bonuses are two different things. Bonuses are in excess of salary. They are rewards for meeting specific measures or goals.
What goals and measures have any executives at Chrysler met? The company is in complete shambles and their sales have been in the toilet for 15 years. Heck, two years ago they were building 20% cars than they were selling....just keeping the factories humming along....thus causing HUGE discounts.
Once again....they deserve to get paid....but they DO NOT deserve bonuses.....none of them do.
Amien 9:20AM (11/14/2008)
Excuse me? Aren't top executives the ones who make decisions? There's responsibility to go with the privileges...
Librapaj 9:21AM (11/14/2008)
No one is saying they shouldn't get paid. Everyone deserves to get paid for the work they do. Typically, bonuses are for when you are meeting or exceeding their job requirements and expectations. They are neither meeting them nor exceeding them.
Shipey 9:23AM (11/14/2008)
Did you read the article?
They were promised the money for staying onboard following the Cerberus deal.
Last time I checked, that deal went through. It's a contract, and they're obligated to fulfill it.
Assuming they get through the current crisis, how could any new hires take them seriously if they have a history of not honoring their contracts?
Now you'd have a viable company unable to attract top talent, which would put them right back where they started.
Chris MacMillan 9:27AM (11/14/2008)
Pay them their salary but can the bonuses. I do not believe anybody in management at Chrysler, or anywhere for that matter, is worth a bonus just to stay put when the company they are running is failing. Put that money to work keeping the lights on and the assembly lines running.
Shipey 9:30AM (11/14/2008)
I think the label "bonus" is what's throwing things off here.
This is not a bonus in the sense that they're being rewarded for performance. It's a lump sum, apart from their regular salary, promised to them for completion of a specific task (staying put) which they have completed.
They were told they'd be paid for staying.
They stayed.
Pay them.
End of story.
JZeke 9:56AM (11/14/2008)
Regardless of this now-irrelevant contract, these executives ought to do what some industry leaders have done, and eschew these bonuses until a plan is made.
We're entering an era were morality is creeping into capitalism. Despite what all the conservative Reaganites say to the contrary, I believe it is our best interest to have leaders of industry who display not only fiscal but moral responsibility as well.
TJ 9:57AM (11/14/2008)
Shipey, you are missing the point here:
from each according to their ability, to each according to their need.
Do I need to send you to a reeducation camp?
Also, While Chrysler is struggling, they are making progress. For instance, the team that put together the new Patriot interior. Chrysler is making both small steps forward (patriot) and huge steps forward (ram). Too many are calling for death here.
Shipey 10:07AM (11/14/2008)
TJ,
You ain't kiddin' brother. America is welcoming Mr. Marx with open arms. The times are a-changin'. The recent election is proof of that. The worst part is, I don't think Joe Public really gasps exactly what they've done.
I fear for our future.
"Forgive them, Lord, for they know not what they do."
n8new 10:14AM (11/14/2008)
I think what is misleading most of the bloggers here is the way the story is presented.
1. The headline "Chrysler paying big bonuses to execs who stay." This gives you the immediate impression that Chrysler is planning to reward execs who stay through their current troubles with newly-established bonuses. Reading through the story indicates that this is no where near the truth.
2. "Chrysler LLC has an executive bonus plan in place that will cost the automaker about $30 million at the same time it's asking Congress for federal aid money to keep the lights on." The phrase "will cost" implies that the bonuses have not yet been paid. If that is actually the case (which I doubt), then these executives have definitely held on a long time to receive a promised bonus -- a bonus that was based upon staying and NOT upon company results. I have a feeling these bonuses have already been paid and, therefore, cannot be rescinded. In which case the more correct phrase would be "Chrysler LLC paid $30 million in an executive bonus plan established by Daimler, and before asking Congress for federal aid money to keep the lights on." (Not "at the same time.")
All of these blogs are written in a manner more designed to incite reaction than to present the truth. And this one has achieved that objective -- to incite reaction. (Because if no one is responding to your blog, your blog's advertising dollars decrease.)
Tai 12:24PM (11/14/2008)
The company is going down the toilet and you hand them "bonuses". You must be smoking something serious to believe they deserve it.
I would like to see them leave and find other jobs. What are they going to put on their resume? "I saw the systematic destruction of my own company and milked them for all they are worth"