• Feb 22, 2010
Two different outlets are reporting two seemingly conflicting reports about pay at General Motors, but it's clear regardless of the details that money is in motion at The General. Ed Whitacre, Jr., who doesn't receive any pay as GM's chairman, is waiting on approval from the Treasury pay czar for a $9 million "pay package" for his recent move to CEO. The pay has been "approved 'in principle'," but we aren't sure when it's going to be paid.

Bloomberg reports that "GM said Whitacre's annual compensation will be $9 million, with a $1.7 million cash salary, $5.3 million in stock that begins paying in 2012 and $2 million in restricted stock." The Detroit News says that Whitacre will get the $1.7 million, but that the $5.3 million in stock will be paid out on a predetermined scheduled over three years starting in 2012. The $2 million in restricted stock is also reportedly performance based, but what criteria will be used to determine when the stock's released is not yet known.

Whether it's $9 million per year or $9 million over five years, we hope it's all the incentive Whitacre needs to get the RenCen ship going great guns again. Bloomberg also reports that he's unhappy with the pace of change at the company, canceling executives' meetings because they "spend too much time in such gatherings instead of getting work done." Those are the eggs being broken to make a "corporate culture based on decision-making and accountability" omelet.

There is no question, though, around Fritz Henderson's pay package: he earns $59,090 for 20 hours of work per month as a consultant. He is back in the GM family to help the company with its international operations, something he is well regarded for. It might sound like a lot, but he left with no severance last year and it's only a little less than he was being paid as CEO to do a lot more work. And if he can help GM recharge the Opel/Vauxhall franchise, who knows, he might be worth it. Hat tip to John!

[Source: The Detroit News, Bloomberg | Image: Bill Pugliano/Getty Images]


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  • 50 Comments
      • 4 Years Ago
      The world has truly changed, it seems. Decades ago, executives jumped out the window of their penthouse office when the company failed. Today, they just steal from the taxpayers with the help of the government.

      The taxpayers, the middle-class, the Average Joe gets screwed while fat cats gorge themselves on public funds and get ridiculous bonuses even when they fail.
      • 4 Years Ago
      That is most definitely not $9M per year.

      The Henderson consulting gig baffles me most of all.
        • 4 Years Ago
        LS2: When the Bill Parcells resigned from NY Giants, they hired Ray Hanley, a company man, and brilliant NUMBERS man. He was a lousy head coach, he lasted less than 1 season on the job and never got another head coaching gig. Fritz Henderson = Ray Hanley. Whitcare knows what Fritz's strength is, and made him an offer he could not refuse. :)
      • 4 Years Ago
      Your tax dollars? lol

      Believe you me the government is benefiting also since they take 40% from their salary, that's the bracket they are in...It should read more like the CEO makes 5Million and the Tax man gets 4Million...
      • 4 Years Ago
      It will be worth it if he can make GM profitable again.
      • 4 Years Ago
      Seriously, 1.7 million in cash isn't that much, and to people thinking $500k would suffice your average run of the mill pharmacist at walmart makes minimum $100k and they manage an organiza...a pharmacy of 6!! Come on get real, GM is a huge company, even after cash and stock 9.7 mill seems kind of low.

      BUT i do believe GM isn't in financial shape to be paying this kind of money to anyone, especially after taking gov help. Why not a dollar salary with all pay based on 5 year performance? Now that would be incentive to get profitable.
      • 4 Years Ago
      Because $1 million just wouldn't cut it? How many jobs would $8 million create elsewhere in the company?

      I suppose I will never actually understand executive pay.
        • 4 Years Ago
        congratulations on proving money doesn't equal talent. That wasn't the argument I was making (I proved that money doesn't equal talent years ago when I hired a chimpanzee and paid him 2x what I pay other employees... it didn't work out)

        Look, I'll simplify it for you. Let's say you are a very talented individual who has the ability to run some of the largest corporations on the planet. As an individual with so much talent, you have options. There are many struggling companies looking for new management. And even companies that are doing well are always looking to improve. Since you are so talented, lots of companies want to hire you. You're not a charity worker, so when reviewing your options, one of the things you look at is salary. If one company is offering you $500k and other companies are all overing you $5+ million, you'll take the $5+ million. It's in your best interest to do so. So what happens to the company offering $500k? They just lost out on your talent. And they lose out on everyone else with talent of your caliber, because those people also have options that pay more. Instead, they end up with someone who doesn't have an option that pay more. Why don't they have an option that pays more? Because they don't have the talent to command it.
        • 4 Years Ago
        Is $1.7 million too high of a salary for the CEO of one of the largest automakers in America? Absolutely not. That's why I can't wrap my head around all the complaining on this post. It's capitalism, kids. The bosses make money.
        • 4 Years Ago
        Try to think of executive pay as, I don't know...not pay. Its more like winning the lottery. Executives are where most companies bleed from. Would he peform any better if he were to be paid 500K a year? I think not. They should have took the other 8.5 million and gave it back to their R&D or back to taxpayers in the form of a handwritten check to each Amercian(i don't care if it was pennies), signed by Whitacre in his own ink, not a printed copy.
        • 4 Years Ago
        No ones making 9 million. He will make 1.7 million - in cash. The rest is stock. If he doesn't sell it he doesn't make money off it. If the stock tanks because he and the others he is responsible for do a lousy job then it's bad for him. Is the 1.7 million too much? Maybe. That's a different argument. But it's not 9 million. We don't even know if GM will issue stock anytime soon.
        • 4 Years Ago
        they didn't get to be rich and successful by giving money to other people...
        • 4 Years Ago
        @alex: Talent, you say? They were paying the previous GM execs way more! So it proves that money doesn't equal talent. So executive pay is way too high and a drain on the companies monetary resouces.
      • 4 Years Ago
      still this "pay package" is an annual deal.....so every year that he is there which is at least until 2012 he will get those 1.7M in cash and the 5.3M in stock and the other 2M in restricted...i wonder if this is coming from GM profits......
      • 4 Years Ago
      No one can argue that this is a lot of money but CEOs/Execs get paid a lot of money. They have HUGE responsibilities, i mean they are in charge of a large, global company. I have NO problem with CEOs making that kind of money because when you really think about it, it is a small portion of of GMs income/expenditures.

      I would suggest that a assembly line or warehouse worker at GM making 50-60 thousand a year (sometime more with overtime) is insane. These workers are uneducated, any person could assemble a vehicle or package chassis. Not anyone could be an engineer or a CEO of a company.

        invisiblepigeon3
        • 4 Years Ago
        That's because you've bought into the false-capitalist looter brainwashing that proclaims that this man actually does anything, except the most rudimentary of tasks. This guy is obviously not a Ferdinand Piech or a Bill Gates or Steve Jobs. GM is not VW or Microsoft or Apple.

        GM changes their figurehead every few weeks, in an attempt to smokescreen the taxpayers into thinking they're doing anything but looting their tax dollars and flushing them down the toilet, making useless, hideous, awful cars like the Volt.
      • 4 Years Ago
      What astonishes me is the lack of business knowledge many have when talking about CEO's salaries. With out looking at annual revenue, gross returns, and actually any business facts at all many people express that CEO's make to much just because the make more than there own salary. Kinda bitter...Were there true problem lies is the individual companies that don't have realistic figures for the profits they are or are not making.

      And for those who say give them 500K and pay them if the company meets X amounts. Good luck finding a guy who would put up with all the politics and negative press for 500K. AND they already have that. Its called stock options, if a company does better CEO's make more money.

      People have a native tendency to dislike anyone who makes more than them. And i guarantee these guys are more stress than many people will understand
        • 4 Years Ago
        Can't find someone to take a lower paying job in this economy. Ya right. In Japan, many CEO's put their own salary where the company profits are. Almost every level of salary is dependent upon success of the position. For some reason, American CEO's are locked in a contract and get paid regardless.

        artso06, people don't have a negative tenancy to dislike people who make more money, but with the economy, CEO's getting huge bonuses from bailed out companies is really bad PR. A 500K starting salary would be good PR, not bad.

        I've never heard anyone say Bill Gates, Howard Schultz, Steve Wozniak, Paul Allen doesn't deserve their money. They are wealthy because the companies they help start are now very successful. If the companies would have crashed and burned, then they wouldn't be.

        CEO's get paid no matter how bad a company is doing. It's not good business practice in this new global economy. They should be hired and fired dependent on success or failure.

        • 4 Years Ago
        Generic, while salaries in Japan are a closely guarded secret, somehow Shoichiro Toyoda's (honorary chairman) net worth is estimated at $500M.
        http://digg.com/d3l5HO
        True figures can't be found as Forbes reported in 2007 his net worth was $800M.
        Akio Toyoda's salary as far as I can find is not available for public knowledge but is estimated at $12M plus stock options. All the crap going on with Toyota these days, is he worth it?
        invisiblepigeon3
        • 4 Years Ago
        arts, You're only making yourself look like a moron by continuing to talk. Your inability to provide any objectivity to what you say, combined with your inability to spell doesn't help your case.

        Generic is correct, there's plenty of people who could run the company for a lot less money out there. CEO's who start successful companies, or turn them around without bending taxpayers over, are the ones who deserve respect and huge bonuses.

        GM has been excuse making and apparently hasn't turned their massive ship around yet. They have a great advertizing department(sarcasm) so they don't need the likes of you to make excuses for them too.
        • 4 Years Ago
        Generic it shows how very little is known about business. Well im not arguing CEO's could make to much in some circumstances you cannot compare Japans CEO's and American's CEO. In recent years Americans have been forced to express and decide on a fair pay for CEO's, its a very different culture, and as you see more an more global trade going on those figures will all come in line.

        And Ya right, you can find a certain number of any people QUALIFIED for this job or want it. Your one optimistic person to think someone is going to take a job for 500k with that much political pressure and name tainting that could go on. An company is similar, these men are figure heads, figure heads that have power but are qualified, firing one person is PR crap. People who are to blind to see that this equates to almost nothing. People are overpaid all over the bored right down to union workers but it is a crime to lesson there pay too.

        article
        http://news.cnet.com/The-great-overpaid-CEO-debate/2010-1014_3-6078739.html
      • 4 Years Ago
      What about our tax dollars?
        • 4 Years Ago
        They are only paying back the "loan". We own 60% of this company, of which we will never get back what we put into it. But hey the UAW says we saved 4 million jobs,... right?
        • 4 Years Ago
        Throwback, the IPO (initial public offering) for new-GM is said to include a huge chunk of stocks for the US government, which the US government will then sell over time. That is how you sell equity in a public company. Silly you.
        • 4 Years Ago
        Chase,

        The only problem is that GM would need a significantly greater market cap than it ever had in the entire history of the company to pay the government back. Their business has yet to become profitable and it doesn't have tech stock growth potential.

        I wouldn't expect the market to value GM higher than Ford any time in the near future, so the taxpayer will only end up getting a small fraction of their money back from the sale of new GM stock.
        • 4 Years Ago
        lne937s , thanks for the response. You are exactly right, for us to get back our money GM would have to have a market cap higher than they have ever had, even during the 50's and 60's. We all know that will not happen.
        • 4 Years Ago
        They're paying that back this july. So.... yeah. Ed is not in it for the money look what he made when he left ATT. What GM is going to pay him is really chump change. Yes a lot for you and me, but for him not much. IF he can eally turn around GM as a company I'd say that was worth 9 million. Heck they paid 20+ million for someone to ruin it, not a bad deal pay half as much to fix it. What I find so sad is that he's only getting 9 million. The real focus should be on the bank CEO's Ed's entire pay package is less than their (Bank Execs) Bonuses. Not including saleries.
      • 4 Years Ago
      I think most people have problems with CEO's getting paid so much for a company that isn't doing so well. They might be paying the government loan back, but they just had to take a loan and file for bankruptcy.

      CEO's don't actually have to prove they are good, they get paid under contract and earn ridiculous bonuses even when a company is doing bad. Executives shouldn't be rewarded for failing, but in the US, they do.

      Is 1.7M a year too much for a company scraping by? Ya, Kinda. What about a 500K starting salary with a contract of 2M if the company meets X amounts of sales. Oh wait, I'm using logic again. I really got to stop doing that.
        • 4 Years Ago
        Much the same way that Ford turned around and started making money recently despite selling fewer cars, GM will as well.

        A very large part of the reason the Big 3 were not making much compared to the number of vehicles sold was due to higher labor costs (from many sources, including higher wages, more expensive benefits, and legacy costs).

        That issue has largely been solved now due to the rengotiated contracts with the UAW. When previously, it cost the Big 3 about $2,000 more per vehicle in labor and benefits than their competition, that has now been largely erased and Ford, GM, and Chrysler are now on an even playing field with the rest of the marketplace.

        That's now $2,000 more in profit per vehicle that Ford, GM, and Chrysler are getting that they didn't have before. GM sold 146,825 vehicles in Jan. 2010, do the math. Those are big, big numbers and can easily do a lot towards turning the company's fortunes around.

        You combine that with the erasure of a lot of debt from GM's books and suddenly they are awash with cash. I don't think it will be long before GM is posting quarterly profits once again.

        http://www.autoblog.com/2009/12/18/report-gm-to-speed-up-development-of-vehicles-delayed-by-bankru/

        quote - "Post-bankruptcy, GM finds itself with $40 billion in cash and a lot less overhead, so where is the money being spent? Automotive News reports that Vice Chairman Bob Lutz confirms that many of the products that were delayed are now being accelerated, adding "Once we got out of the bankruptcy and started having money available, we were able to pull a lot of our programs forward." " -

        • 4 Years Ago
        Generic: You think GM is scraping by? Don't be a fool. GM before bankruptcy had its problems. GM today, is making good money. Take a look at their numbers, they are selling more cars than ANY other automobile manufacturer in this country & China, by far the two largest auto markets in the WORLD. With Toyota in a death spiral (even if people still have "faith" in Toyota, crappy resale values will do them in, ask Mitsubishi). GM & Ford will make huge gains in the next year.

        Also look at the cars that GM is doing exceptionally with. The Lambdas average 12 to 15k units per month, SRX & CTS doing 8 to 10k per month, LaCrosse range between 4 to 6k per month. GMT900 platform 49K. Equinox & Terrain 13+k, Impala 10 - 14K, Malibu 12 - 16+K. Camaro 5 to 7k. All middle and upmarket cars.

        Here is the difference between GM & Ford, Trucks aside (GM still sells more trucks). Ford's numbers come mostly from their vehicles with the least profit margins, The Fusion and Focus (P.S. The Malibu outsold the Fusion in January). GM is less reliant on the Cobalt & Aveo, and that too will soon be addressed.

        Take a look at the dismal numbers Ford is doing in their middle and upmarket vehicles, that is where the profit lies.

        If GM & Ford continues on their current trajectories, you will see a widening gap between the two within the next three years.
        • 4 Years Ago
        Ine937s: A couple of things, You could not possibly know if GM is now operating at a profit. They're are currently not a publicly traded company, and is not required to report earnings like say Ford. May 31st of this year, it is possible that the US government will issue a progress report on GM & Chrysler. Then and only then will ANY of us know for sure.

        Simple logic says that since they have shuttered or sold all of their unprofitable lines, and drastically reduced their liabilities through bankruptcy, they are currently operating in the BLACK. How much so? who knows.
        invisiblepigeon3
        • 4 Years Ago
        For all your hypothesizing Greenthumb, you admit not to knowing thier true financial status. They could be scraping by, and if their Volt dance is any indicator of progress, they'll be back in the red soon enough.

        So, what GM POS do you drive and have irrational faith in?
      • 4 Years Ago
      only in America can you make millions of dollars running companies into the ground.
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