REPORT: GM cutting executive pensions, ex-CEO Wagoner to get pinched the most
With General Motors in bankruptcy, it was only a matter of time before pensions came under scrutiny. The Detroit News is reporting that GM CEO Fritz Henderson has confirmed that executive pensions beyond $100,000 per year will be cut by two-thirds. Recently defenestrated boss Rick Wagoner will likely take the biggest hit of all – he was supposed to receive $22 million over five years as part of his retirement package, but that number will reportedly drop by up to $15 million.
The move by GM mirrors closely that of Chrysler, which also took an axe to its executive retirement pay structure. Ex-CEO and one-time company savior Lee Iacocca lost his company car and may lose some or all of his monthly stipend, and he is now representing 1,200 ex-Pentastar employees protesting the move. Chrysler retirees have been lumped together with the Pentastar's other creditors, and it will be up to a judge to determine what amount they will receive in the months and years ahead.
[Source: Detroit News | Image: Bill Pugliano/Getty]
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Reader Comments (Page 1 of 3)
Swede 1:06PM (6/16/2009)
I pinch
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Valentino Amoro 2:20PM (6/16/2009)
Pensions?? I didnt even know firms offered pensions these days. I work at a large tech company, we're making money and have salaries frozen. Never heard of anything like a pension.
Seriously though, sorry, there is no contract. The firm is bankrupt. Therefore, all contracts are null and void. Sure, you worked hard and will loose money (and a ton of other people are), but there is no money to hand out and the Govrn certainly should support pensions, especially since there's always social security/retirement payoffs in the US.
Valentino Amoro 2:28PM (6/16/2009)
I meant, 'shouldnt', It's ridiculous. 7mm to Wagoner is outrageous. If the lower levels folks are loosing out, so should he.
BA is asking people to work for free. Again, another example of exec outrageousness (and FYI I am on an exec trajectory where I work/have exec aspirations in case a few folks say I'm being bitter).
Check this out, an exec making over $90K a month is sacrificing his ONE month of salary, and think he's leading by example for the baggage handlers and folks who are scouring a living. What kind of illusion is that:
"British Airways is asking thousands of staff to work for nothing, for up to one month, to help the airline survive.
The appeal, sent by e-mail to more than 30,000 workers in the UK, asks them to volunteer for between one week and one month's unpaid leave, or unpaid work.
BA's chief executive Willie Walsh has already agreed to work unpaid in July, forgoing his month's salary of £61,000.
"
http://news.bbc.co.uk/2/low/business/8102862.stm
Swede 3:36PM (6/16/2009)
http://www.youtube.com/watch?v=AafzLbM7GqM
Justin 1:07PM (6/16/2009)
Precisely as it should be.
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Shiftright 1:11PM (6/16/2009)
Awww, he'll only get $7 million? How's he supposed to live off that?
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Fernando 2:05PM (6/16/2009)
Exactly! F#@K these rich execs trying to scam even more. They can go on unemployment like all the other people they fired or caused to lose their jobs with the boneheaded decisions they made.
Todd 9:49AM (6/17/2009)
I know! He can probably buy half of Michigan with that much even.
Jvijil 1:17PM (6/16/2009)
oh how hard it is to live off $15 million...
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jv2k 2:30PM (6/16/2009)
I agree. He'll probably starve.
katshot 1:18PM (6/16/2009)
Not that I think ANY of these people actually deserve the huge money they have been promised but...a contract is a contract.
What I find bad about this kind of thing is that in the future, companies will be even MORE likely to go ahead and make these kind of huge promises on contracts, since they now know that even though it's in writing, it can still be changed in the future. Kind of sets a dangerous precedent, no?
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Redeemed 1:26PM (6/16/2009)
I have to agree. From this point forward, to reduce payouts of future retiree's is certainly justified. But to go back and change it retroactivity is wrong.
I can understand the angry comments against executive's getting this money but the problem is it sets a bad precedent for all other retiree's throughout the economic scale. Once you start swinging the ax, it's easy to keep going.
accelerating_cubicle 8:19PM (6/16/2009)
that "precedent" went out the window with Enron.
and yea every common man loves to dogpile an elitist.
Pinch!
AZZO45b 1:53PM (6/16/2009)
GM is BANKRUPT ... what contract???
Ask the numerous suppliers & advertising agencies if they got paid yet? Chrysler is in the same boat.
Ask Richard Petty Motorsports how many Dodge checks they've received since Chrysler bankruptcy... they had a CONTRACT as well.
Mr.Oak 2:12PM (6/16/2009)
Katshot / Redeemed: Only companies who ran to their fairy god-parents (US Congress) are affected. I could live with that. Gov't not imposing these heinous conditions on Apple or Boeing are they?
Actually, I was supportive of the government bailing MOST of these companies out, and not so much for the companies sake. Was really ticked off about the original TARP handouts, because the terms had no teeth.
The government should, in our nation's interest, help MOST of these companies through tough times. However, the government should not throw a Fiesta, hang piniatas loaded with tax payers' cash and give whacking sticks to these jerks.
jsjs 2:59PM (6/16/2009)
katshot -
Corporations renege on contractual obligations all the time when they go into Ch11 reorganization.
Heck, many corporations "renegotiate" financing terms w/ their lenders or other creditors outside of Ch11.
Jason White 1:23PM (6/16/2009)
I hope Lee Iacocca now drives a ford. He literally saved that company and they repay him by taking his chrysler away. I mean sure he can afford anything he wants probably, but its the principle of it. They owe that to him. And Wagoner can go crawl under a rock somewhere for all I care. Wagoner needs to get pinched a lot harder than he is getting now, like to the tune of maybe a couple hundred thou instead of countless millions for running GM into the dirt. Whew... I feel better now.
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AZZO45b 1:50PM (6/16/2009)
Jason: Mr. Iaccoca just joined the National Chrysler Retiree Organization to assist his ex employees!!!
http://www.ncro.org
I think he can afford to give his Chrysler lease cars back (or buy new ones...) He's not driving Fords (unless he wants to...) GM retirees won't be calling Rick Wagner (& could give a $h*t what he drives...)
Mark B. Morrow 3:39PM (6/16/2009)
Lee does drive a Ford on occasion. He has one of the first Ford Mustang convertibles. Chrysler should hire Lee back. He is the one person who might be able to get America to give the "New Chrysler" a chance.
AZZO45b 5:27PM (6/16/2009)
Mark... The new face of Chrysler is a much younger Italian guy!!! He will intro Fiat & Alfa Romeo's to Americans. Will also trim GARBAGE like Jeep Compass & the Avenger / Sebring twins.
Let Lee assist the retirees & enjoy his vintage Mustang (that Ford or Chrysler didn't pay for...) JMO