The Treasury Department now owns 61% of GM, but apparently the new owners are being stingy. The Detroit News says GM Vice Chairman Bob Lutz said Friday that the top 25 senior executives (whose pay packages are being reviewed by the Treasury) are “way, way, way” underpaid.
From the Detroit News:
“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.”
Apparently this lack of pay is hurting GM’s ability to hire the best people. They were unable to find a CEO and instead just appointed their Chairman Edward Whitacre Jr. to the job.
Still, they’re not exactly broke.
Feinberg ruled in October that salaries for GM’s top 25 executives would drop by 31 percent, while total compensation would decline 20.4 percent. Just one other executive in GM’s top 25, beyond the CEO, was to earn more than $500,000 in cash.
“Right now, that isn’t a problem, but over time, clearly a company that undercompensates senior executives is going to have a retention or recruiting problem,” Lutz said.
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.
The pay limits for GM’s top executives are understandable considering the firm’s stay in bankruptcy court last year, Lutz added.
“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,” he said. “We just hope it doesn’t stay this way too long.”
GM’s Lutz: Auto execs are ‘way’ underpaid [Detroit News]