How much does Nardelli really earn? Could be much more than $1
The president decreed that CEOs running banks that received TARP funds couldn't be paid more than $500,000 each year. Chrysler isn't a bank, yet it has received TARP funds, and its CEO, Bob Nardelli, is well under the $500,000. Or at least, he might be. During recent Congressional hearings Nardelli was asked if he'd take a pay cut to $1 a year, and he said he would; the only thing is, he was already making $1 a year.When Nardelli joined Chrysler in 2007, he signed on for an annual paycheck of $1. The question is, is that all he's making? Neither Chrysler nor parent company Cerberus will say, and as a private company, Cerberus isn't compelled to. On the other side of the automaker CEO coin, it has been revealed that GM CEO Rick Wagoner is only getting a dollar and no bonus on top of that.
The issue certain people want addressed is whether taxpayer funds are being vacuumed into CEO bank accounts. In Chrysler's case it's not so clear how much Nardelli makes nor where any amount more than $1 is coming from -- Cerberus has various interests outside of Chrysler which could fund any theoretical bonus Nardelli gets.
[Source: ABC News]
Reader Comments (Page 1 of 2)
FireSermon 6:13PM (2/18/2009)
...and the answer is: too much.
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Fodder650 6:23PM (2/18/2009)
Define to much. Is Ryan Howard overpaid at 54 million? Who are you to decide what the market will bare?
A CEO paid $1 in stock options is the correct way to play the game. They are encouraged to increase the value of their company. So that the stocks they are paid are worth more. Its as simple as that. And it goes back to quite a few CEO's, Steve Jobs is on this list, who do the same way.
Ok should they get millions of shares? Thats up for debate. But remember in a free market its what the market will bare. Not artificial caps imposed by us.
UNLESS....
You are given money by the US Government and you arent ousted because you created the mess in the first place. In which case we get to dictate what you are paid since we, the taxpayer, is now a stockholder
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n_r_child 6:44PM (2/18/2009)
Unfortunately, that kind of incentive structure often shifts focus to short term gains at the expense of long term health.
wengleung 10:01PM (2/18/2009)
@Fodder650
No you don't become a stockholder of the company just because the government of the U.S.A. decided to lend emergency funds to the company. That's because the nature of the fund is in the form of debt, and not owner's equity. So technically you are only creditors.
Parkerman 6:25PM (2/18/2009)
So.. Uhh... In all honesty, what was the point of this article?
To sum the whole article up...
He makes $1, there is a chance he makes more.. but.. we have no proof.. so.. end of story.. He still makes $1 for all we know..
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Polly Prissy Pants 6:41PM (2/18/2009)
Actually the point is he _may_ make $1 but he won't really say. And when you're sucking at the government teat and that teat limits your compensation, then you're kinda on the hook to disclose your compensation package. But he won't.
Personally I'd say fine, you got till 5:00pm Friday to either deliver a detailed report on your total compensation package or return our money. Your choice.
big J 9:30PM (2/18/2009)
The point is this guy is probably playing everybody for fools and that he's probably still getting compensated plenty through other technicalities.
Rocketboy 6:56AM (2/19/2009)
Or, according to the article, he may not be..
DJ 10:27AM (2/19/2009)
Have to agree, this article is written as if this is some kind of journalistic coup, makes Autoblog look very naive.
Frank 1:48PM (2/19/2009)
This sounds like the typical crap over on the "The Lies About Cars".
Cole Carrera 8:51AM (2/19/2009)
Who cares? Wagoner etc have near hundreds of millions in stock, cash and other assets since a while ago (more a while ago). What they're choosing to make now is entirely inconsequential. (Unless it's a substantially over 500k, which would be bad.)
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imirk 6:32PM (2/18/2009)
The point was the caption, thats all, and thats awesome
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Jim 7:53PM (2/18/2009)
"feel sorry for Cerberus. It'll cost 'em a fortune in fudge."
cookie for the reference...
Big Rocket 10:04PM (2/18/2009)
@Jim: Augustus Gloop, referring to his Golden Ticket and his lifetime supply of chocolates from Willy Wonka (in the original movie, not the remake). I happened to have re-watched the movie 2 weeks ago.
Come to think of it, the banks, GM/Chrysler, etc, seem to have won Golden Tickets of their own, with a lifetime supply of taxpayer bailouts.
Mobius_1 6:35PM (2/18/2009)
I couldn't survive on $1 a year. :P
At the end of the day, this is somewhat irrelevant, in the same way the private jet fiasco a few months back. It is all a matter of image rather than actual costs. However, I think he should be morally inclined to turn the company around, regardless of his pay.
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Lee 8:55PM (2/18/2009)
The guy left Home Depot with $200 million, he doesn't need any money. When he started at Chrysler it was because he "wanted to do good and clear his name of the HD fiasco"..and that he would work for 1 dollar.
Before the bad CEO comments start, he was very good at General Electric (Manufacturing) and implemented their "six stigma" management structure to Home Depot (Retail) when he arrived there, and was rewarded with increasing revenue from 40 Billion to 85 Billion in just 5 years.
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BigWill 10:08PM (2/18/2009)
That's precisely the problem ... great short term results, disastrous long term results that Home Depot was trying to recover from before the economic downturn. But, hey, you don't get the multimillion bonuses for strengthening the company for the long term.
BTW, The Church of Six Sigma ain't all it's cracked up to be.
a.r. 3:05AM (2/19/2009)
Don't mean to nitpick, but it's six sigma.
I'd hate for somebody to implement six stigma. lol.
Danny F. 9:07PM (2/18/2009)
$5 bucks says he's really making $1 on salary.... but taking over $500,000 in distributions lol.
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michaelB 12:31AM (2/19/2009)
Hmm $1 per year....Sure makes this college kid feel rich. HaHa
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