GM proposes to pay CEO $11.1 million in 2013

[kscarbel]

February 25, 2013 / Detroit News Washington Bureau

Washington — GM wants to pay its CEO $11.1 million in total compensation this year — an increase of more than 20% over 2012 - and offer raises to most of its highest paid executives, according to a document turned over to Congress.

GM, which received a $49.5 billion bailout in 2008 and 2009, must get approval for the pay packages for its top 25 executives from the Treasury Department, as a condition of its government bailout.

GM is proposing raises for 18 of its top 25 executives for 2013, with each of those making at least $1.8 million.

CEO Dan Akerson didn't get a raise last year, but received a $9 million pay package, including a $1.7 million cash salary. He makes far less than the CEOs of Ford Motor Co., Chrysler Group LLC and Volkswagen AG, all of whom earned more than $20 million last year.

In a 2011 interview, Akerson confirmed he gave up "more than" $100 million in 2010 to run GM when he left Carlyle Group.

GM disclosed its proposal to the House Oversight and Government Reform Committee, which is holding a hearing on executive pay on Tuesday on companies that got large bailouts.

In 2012, the CEOs of three companies that received large government bailouts — GM, Ally Financial and AIG, didn't receive raises.

GM is proposing to pay about $82 million to its highest 25 employees in total compensation — over the $65 million it paid them in 2012.

The pay restrictions were imposed by Congress in the midst of an outcry in 2009 over high pay and some firms that received large government bailouts. GM must live with the restrictions until Treasury completes its exit of its remaining 19 percent stake, which the government says will happen by March 2014.

Taxpayers stand to lose about $12 million on the $49.5 billion GM bailout at current trading prices.

Christy Romero, the special inspector general overseeing the $700 billion Troubled Asset Relief Program, will testify before the House panel, as will the Treasury's acting pay czar, Patricia Geoghegan.

The House Oversight and Government Reform Committee's panel on economic growth, job creation and regulatory affairs is examining the pay of executives from firms that received large government bailouts in 2008 and 2009.

Last month, Romero criticized the Treasury for approving "excessive" pay raises at GM, Ally Financial Inc. and American International Group Inc.

Executives from the firms will not testify on Tuesday, but have defended the pay packages as appropriate.

The report was critical of Geoghegan, the Treasury's special master overseeing executive pay at companies that got very large bailouts.

In the coming months, Geoghegan will have to approve pay packages for the top 25 executives at GM and Ally for 2013. The committee will seek "her reaction to the report as well as her efforts to ensure that these problems are corrected as (her office) prepares pay package determinations for executives in these companies moving forward."

Cash salaries of $450,000 or more were approved for 94 percent of the top 25 employees each at AIG, GM and Ally.

"While taxpayers struggle to overcome the recent financial crisis and look to the U.S. government to put a lid on compensation for executives of firms whose missteps nearly crippled the U.S. financial system, the U.S. Department of the Treasury continues to allow excessive executive pay," the report said.

The executives at GM, Ally and AIG "continue to rake in Treasury-approved multimillion-dollar pay packages that often exceed guidelines" previously announced, the report said.

AIG repaid its government bailout in December and is no longer subject to the pay restrictions. Initially seven companies — including Chrysler Group LLC, Chrysler Financial, Citigroup Inc. and Bank of America — were covered by the restrictions.

Geoghegan agreed to shift more pay away from longer-term incentive pay.

She removed long-term restricted stock for senior executives, including the CEOs of AIG, GM and Ally.

In total, she removed long-term restricted stock from 24 of the 34 employees' pay packages and, for all but one of the 24 employees, replaced it with stock salary, as requested by the companies.

In total, she approved pay packages worth $5 million or more for 23 percent of the top 25 employees at AIG, GM, and Ally — nine at AIG, three at GM and four at Ally.

In 2012, the Treasury approved all 18 pay raises, totaling $6.2 million, which were requested by the companies. Nine of those raises went to GM executives.

Geoghegan said in the letter that she has "limited excessive compensation while at the same time keeping compensation at levels that enable" the companies "to remain competitive."

Treasury noted that average cash pay was cut by more than 90 percent over the pay received before the bailouts.

It agreed to shift compensation to stock salary, which is earned immediately, from restricted stock that vests over time when an "executive is very senior and may retire in the next few years."

Treasury approved raises at GM of 15 percent to 23 percent without any further detail or analysis for four employees "on the basis that they were among the individuals that GM's CEO most relied on, and they had received significant promotions or increased job responsibilities," the audit said.

The audit said that for one GM employee who received a cash salary of $600,000 in 2011, Treasury approved an additional $50,000 in cash in 2012.

[farmer52]

CEOs of most companies are OVER PAID!!! No wonder US companies are going broke.

And my GM stock (had) is WORTHLESS!

[David]

Be interesting to see how many of these over paid exec's are on the Obama donor list.

[mackniac]

that is one of the problems , overpaid exec, need money from the gov. to bail out and then do it again and still no law is passed to ovecome that !! bravo , it shows me that no one wants to fix it !! always screw the ordinary people .

[yarnall]

Most of these high paid executives are republicans. They are afraid of the democrats because they would have to pay higher taxes which would go toward terrible things like early childhood education and school lunch programs.

[lucerne tractor]

20% increase in my load rates would be nice, thats not asking for much. Fuel goes up, rates go down.?

[57 bcr]

And the unions are to blame for the failures in our manufacturing,transportation,construction,service industries..........BULLSHIT!!