Yes, you read correctly; auto executives earning six- or seven-figure salaries to run a company that went bankrupt and had to be bailed out by the government, (partially due to the incompetence of some of its high-ranking/paid officials), should be filling their bank accounts with much, much more money, according to GM Vice Chairman Bob Lutz
"What you see is what you get, and it ain't a lot," said Lutz, in an interview with the Detroit News on the sidelines of the National Automobile Dealers Association (NADA) annual convention.
"All I know is, right now, we are given our responsibility. And given the rigors of the job and demands and the accountability, I would say we are being paid way, way, way below market," Lutz added.
The General Motors exec's comments come at a time when the firm's top 25 senior executives' pay packages are being reviewed by the Treasury Department.
The agency's pay czar, Ken Feinberg, ruled last fall that the salaries for GM's top 25 executives would fall by 31 percent, while total compensation would drop 20.4 percent, with only one exec beyond the CEO to earn more than $500,000 in cash.
According to the Detroit News article: "since Feinberg set pay limits last year, GM has hired a new chief financial officer, Chris Liddell, who will be paid in $750,000 plus stock awards. Special adviser Steve Girsky is being paid $1.1 million for sitting on GM's board of directors and for advising Whitacre. His pay includes $200,000 a year as a director and a monthly grant of salary stock valued at $75,000, or $900,000 a year."
As for Whitacre's pay, it will be eventually revealed in a voluntary Securities and Exchange Commission filing. Not that Whitacre will go hungry since he received a hefty $158 million retirement package when he left as CEO of AT&T in 2007...
But as always, there's more than one side to a story. Even though Lutz's remarks may sound offensive to some given that as a company, GM is also performing 'way below market' and is currently running on federal loans, he does have a point when he says that the drop in payments may have a negative effect on GM's ability to recruit talented executives.
"Right now, that isn't a problem, but over time, clearly a company that under-compensates senior executives is going to have a retention or recruiting problem," Lutz said.
The GM Vice Chairman diplomatically ended the interview saying that: "You can't go through Chapter 11 and come out the other side and expect to have all of the same perks and comps as you did before. We just hope it doesn't stay this way too long."
Via: Detroit News