GM Wants To Be Able To Pay Executives More Money

General Motors Co. Chief Executive Daniel Akerson says he’d like a little more leeway on executive compensation from the Obama administration because the company is having trouble attracting quality executives.

Mr. Akerson, in his first high-profile speech since becoming CEO in September, said he will meet Friday with the U.S. official who oversees pay limits placed on companies that received money from the Troubled Asset Relief Program. He said the auto maker has been able to attract quality executives despite the pay limits, “but we’re starting to lose them now.”

“We have to be competitive. We have to be able to attract good people,” Mr. Akerson said.

Akerson went on to say that the company is in a good position to be profitable in 2011.

GM Seeks More Leeway on Pay [WSJ]


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  1. Loias supports harsher punishments against corporations says:

    You are not having trouble attracting good executives. You just don’t know what a good one is. The good ones come because they like the company and actually care, not becuase they get paid 1.5 million instead of 1.2 million.

    • Angus99 says:

      Loias, this post and your updated user handle reminded me of this morning’s USA Today headline: “As Health Costs Rise, CEO Perks Bolstered – Execs Keep Benefits as Workers’ Dwindle”. Good to know that priorities are straight, isn’t it?

    • Bativac says:

      No, actually, I think the good ones will go where they are going to be paid the most. Nobody is going to lead a company just because they “like the company and actually care” unless, of course, they started the company themselves.

    • partofme says:

      That reasoning has never worked for highly-paid employees. It almost never works for sports stars either, possibly the closest analog to execs (and they have ‘legacy’ considerations.. but usually follow the money). Money talks. There are generally a few questions people answer: 1) will the job harm my future career (if one plans for it to be a terminal position, then no problem.. but most people run away from a potential career-killer job)… 2) Are there personal reasons keeping me from moving to the area?… 3) How much money? If (1) and (2) are equally satisfied by GM or some other company, 98% of the time, a nameless person will take the money. Especially the good ones. How do you get good in business by turning down money without a really appreciable upside?

      • Loias supports harsher punishments against corporations says:

        That’s because the current standard practice is to not hire from within. Companies spend far too much money always seeking outside talent, instead of simply creating positive ways to train and promote from within. One of the best arguments for that is that it lowers employee turnaround and increases loyalty.

        • partofme says:

          Agreed. Hiring within would increase the loyalty factor.. supposing there is any amount of loyalty at any level in business anymore. But that’s a far different discussion than whether or not “small” increases in high compensation sways top candidates.

      • AI says:

        I’m sure there are plenty of qualified people in GM’s upper management that would be more than happy to be promoted. Companies don’t have to hire rock star celebrity executives to be successful. In fact, based the current financial situation of the country, I’d say that rock star executives have proven themselves worthless.

        • GearheadGeek says:

          Well, in GM’s case a significant part of their problems stem from the fact that they were very incestuous with promotions before… people who moved to upper management had never worked anywhere in their careers but GM middle management, and it became a giant echo chamber. Too much politics, not enough good decision-making, much like the US government.

    • Alvis says:

      There’s nothing “special” about highly-paid execs. They’re highly paid because they’re highly paid. Plenty of other competent managers to choose from.

    • Shadowman615 says:

      Exactly. If they were truly good executives, they wouldn’t be working for GM just to improve their resume so they could bail within a year or two for a higher-paying job.

  2. George4478 says:

    Hmmm. I wonder how these comments are going to go?

    Arararararichpeople! arararararagreedy! ararararararepublicans! ararararararafoxnews! ararararararacapitalism sucks! wharbgarlblblblbl!

    • sagodjur says:

      I’ll take the bait.

      Capitalism sucks. Building a system in which greed is appealed to in order to incentivize the supposedly best and brightest to work for the benefit of the whole only leads to the greediest and the most underhanded to follow the money, even if it leads to non-productive, or even destructive, results for the whole.

      You can’t set the scorpion loose and tell him to sting anything he wants and then be surprised when he turns around and stings you.

      • TuxthePenguin says:

        The current problems I believe has less to do with capitalism as it does with the failure of moral and ethical standards. When you believe that this underhanded action is acceptable, you start to erode at the system itself. Whether its capitalism, socialism, communism or whatever-ism.

        • Bativac says:

          Agree 100%. No system at all is going to work perfectly – be it communism, fascism, capitalism, anarchy, whatever. The fact is that people are no damn good. Desiring to make money and improve one’s lot in life is not a bad thing at all — it becomes bad when the pursuit of wealth trumps all else.

        • RvLeshrac says:

          Uh, no. Capitalism is morally and ethically agnostic. If you want morals and ethics, capitalism is the *LAST* choice in socioeconomic theories.

      • Spook Man says:

        I have to agree with you. The modern capitalistic system is failing due to greed. These executives and board members are making unbelievable amounts of money because of it.

        I love how corporations will raise their rates for no other apparent reason and then pound their chests and get their bonuses because of the profits they made the quarter before. It wasn’t good business sense which caused the profits to raise, it was them raising their rates.

        And because it showed a profit, the stock holders love it to see this and the company’s stock rises. When it does, Wall Street rises as well and they pound their chest talking about how well the economy is doing and how it’s getting better. As a result speculation on the futures of commodities such as oil rises so prices of food for example rises as well.

        So what happens, Wall Street, big oil, executives, board members and stock holders make money hand-over first. What happens to the little guy, more of a struggle to make ends meet and wonder if they’ll have a job next month. Are new jobs being created by these corporations when they’re making record profits? Nope. Screw everyone else. No morals and all greed.

        Don’t believe me?
        1) Goldman-sachs posted a profit AFTER they laid-off 30,000 workers. Have these people been rehired? Nope. But they’re still posting profits.
        2) With the largest surplus and lack of demand for gas/oil in history, the price of oil is up to almost $90 a barrel. Why? Future speculation that the economy is getting better and China’s demand is going to rise. SPECULATION, not supply and demand.
        3) Jobs reports. We’re still sitting at an almost 10% unemployment rate. If the enonomy is doing soooo well, why has this not dropped?
        4) Finally, as an example, Time-Warner raised our rates by $20 a month. No apparent reason and was told to give us better options for our tv/internet needs. Our internet has been cut back in speed as well for the same price and theres nothing new on TV. I’m waiting on the profit report for this final quarter and year to see that their “profits” have risen.

        • TuxthePenguin says:

          Simple question – would you be willing to pay $10 for a Big Mac? I’m not trying to make some point about what happens when you pay low-skilled workers more but rather one very important point.

          You want the most (perceived) value for your money. We have a word for that: greed.

          • Cheap Sniveler: Sponsored by JustAnswer.comâ„¢ says:

            I will gladly pay you $10 Tuesday for a Big Mac today.

            • partofme says:

              So done. In fact, after you provide your SSN and sign at the line, I’ll provide you with a Big Mac line of credit. You can purchase up to a total of 5 Big Macs at any time, so long as you pay me $10 for each one by the Tuesday after purchase.

          • MongoAngryMongoSmash says:

            If McDonald’s charged $10 for a Big Mac it wouldn’t be because they decided to pay their workers more. And I wouldn’t buy the $10 Big Mac, because in the end, it’s still a Big Mac.

    • Tim says:

      This isn’t really about capitalism. The government owns a significant part of this company, so it should be able to act like a shareholder. Since the government should do what’s best for the country, it should vote that way as a shareholder.

      • nbs2 says:

        Then let them elect Directors that vote against increasing salaries for executives. The supposed role of shareholders to directly administer executive compensation is inappropriate.

        I wouldn’t be against the shareholders (all of them) being entitled to an advisory vote, but that’s it.

      • humphrmi says:

        “Since the government should do what’s best for the country, it should vote that way as a shareholder”

        Um, no. As a shareholder, it should vote the way that maximizes profit for the company.

        • partofme says:

          That’s dumb. The idea of shareholder is that the shareholder can influence the company to do what is best for…. the shareholder. Now, if the shareholder in question has the goal of making money (like most people who do that sorta thing), then yes, you’re absolutely right. Suppose, on the other hand, the shareholder bought into the company because they were convinced that it would help save the environment or whatever… then they might vote against absolute profit for the purpose of saving the environment. The government, as a shareholder, can do whatever is in its best interest… whether that interest in in profit or something else.

    • c!tizen says:

      I’m sorry, did you throw a whataburger in there at the end?

    • segfault, registered cat offender says:

      Cats suck, and there’s one in the picture at the top!

  3. Megalomania says:

    How do they define “quality executives”? What metric do they gauge the success of the existing executives with? How do they know that executives that don’t work for them are “quality” anyhow?

  4. Talisker says:

    Pay back the taxpayer’s money and you can cut pensions and raise executive salary all you want.

  5. Verdant Pine Trees says:

    Yeah, when you’re wasting this much of taxpayers’ money, why not a little more?

  6. Hi_Hello says:

    I don’t think offering them more money wouldn’t mean the person have good quality.

    If I was offer a butt load of money to work at GM, I would work for a year, take the bonus and bounce before the GM can’t pay me what I want. I’m not there to help the company. If I was there because I believe inthe company and want to help the company, they wouldn’t need to give me a butt load of money.

    • fsnuffer says:

      Yes and after bouncing between multiple companies your resume will show you are nothing but a mercenary and you would find companies will no longer hire you. Problem solved

      • Loias supports harsher punishments against corporations says:

        Sadly, many execs do bounce around a lot – but companies dont seem to care.

      • DerangedKitsune says:

        Please, like the Good Ole’ Boy Network would let that happen.

      • ludwigk says:

        So how do you explain the droves of executives that do flip flop from company to company all the time? Short tenures, even at very high levels is no longer viewed as a stigma when hiring. Corporate turnover, even at the highest levels, is not uncommon. Just look at the CEO position at HP. Companies know that even extremely high salaries do not promote retention, they just like talking about it like it does.

    • human_shield says:

      You just described most CEOs.

    • TuxthePenguin says:

      So you’re telling me if you had a choice between two positions with the only difference in any quantitative and qualitative factors being double the pay, you would take the lower paying job?

      99% of people (I’d argue almost every living person) would take the higher job. Maybe a candidate likes GM, likes the idea of rebuilding, etc, etc, but also has an offer from Company X for 10% more. A lot of people have a hard time turning down a significantly higher paycheck.

      • sonneillon says:

        The problem is that at the high end executive level there is a limited amount of positions, and a lot of people looking for those positions. High demand low supply. At least as things currently are. The only reason that Akerson is trying to get the limitation lifted is to increase his own salary.

      • Hi_Hello says:

        me personally? I”m the 1% of the people on your survey. I work with a lot of the 1%. I was given a choose between a higher paying job and my current job. I”m not talking about a little higher, I’m talking about 50% higher. I choose the lower paying job.

        why? I believe in the company I work with.

  7. Bort says:

    the level of money they paid executives that bankrupted the company is the type they want to hire again?

  8. Blueskylaw says:

    What’s wrong with the executives who drove them into bankruptcy? Weren’t they the only ones who could save the company because they knew how it worked?

  9. fsnuffer says:

    The arrogance of Daniel Akerson! Does he not realize that when people get elected to office they are bestowed with instant expertise on everything including running a huge multi-national corporation. How dare he suggest that people get payed what they are worth.

    • RunawayJim says:

      If he was paying people what they were worth, the people actually making money for GM, not just telling others what to do, would be paid a whole lot more and have much better benefits. Instead, they’re worried about people who are making 7 figures rather than the people who actually make the cars.

    • StevePierce says:

      If everyone was paid what they are worth, soldiers would make $100,000 a year.

      GM, pay the money back to the taxpayers first.

  10. RDSwords says:

    Given their track record, I’d say their idea of a good executive is highly suspect. I’m sure their are thousands of very motivated and very smart people who would be happy to move into the executive ranks are whatever the current compensation rate is, rather than just recycling the same ones over and over between companies.

    • RDSwords says:

      Damnit! I used the wrong form “their,” which may invalidate my entire post haha!

      • jessjj347 says:

        Nope, that would be an error in logic to think something is invalid because of the style of the speaker :)

    • partofme says:

      This is the only way. You can’t argue that it will be easy to bring in top talent from outside without sweet offers. But you can always promote from within. Now, whether that person will be as capable… probably nearly impossible to predict accurately.

  11. Necoras says:

    Promote from within? Find capable employees and give them more responsibility? Absurd, I know, but it might just work!

  12. chargernj says:

    what is the difference between a $500000, $1 million, and $5 million executive anyway. Seems like it would be a case of diminishing returns after a certain point.

  13. yaos says:

    They had trouble attracting quality executives when they could pay whatever they wanted before. Why would it be different now?

  14. FatLynn says:

    They have a point in that executives won’t want to work for GM if they can get paid more elsewhere. However, the problem is not that GM is underpaying; it’s that everyone else is overpaying. Fix it across the board.

    • partofme says:


      • Evil_Otto would rather pay taxes than make someone else rich says:

        Index executive pay to a multiple (say, 20x) of the lowest paid employee’s salary, for publicly traded companies. Levels the playing field, gives executives incentive to pay people who do actual work more, reduces expenses.

        • TuxthePenguin says:

          Lets take this idea and run with it. But lets restrict the base to the average non-managerial salary.

          Say that it equals 25k a year.

          The C-level gets 50x this. That’s 1.25 million, just slighty over what the tax code will allow. So that last 250k is stock options, bonuses, etc.
          Now what does the Controller, Treasuer, Director of IT, Director of Human Resources, etc get?
          What about the Assistant Controller, and that level?
          Then the level below?
          And the one below that?

          We had wage freezes before. The outcome of that is the current insurance market. Want to roll the dice of unintended consequences again?

          How about instead of being envious of what others make, you do everything you can to make yourself more skillful and desireable to employers? Because sitting back and complaining that the CEO makes $25 million while you only make $25k isn’t going to help you earn more money – at all.

          I own my own practice. I get paid SIGNIFICANTLY more than the lowest paid person that I employ. But… it was my name that was on the loans to start up the practice (try starting a company without a personal guarantee). It was me who went through college, getting my license, putting up with the grind of public accounting, sacrificing to save enough to start my own practice. Its my name on the business cards, my reputation out there, me who did most of the marketing/knocking on doors. So should I be restricted in my “pay”?

          • crashfrog says:

            No, you shouldn’t. You should get paid whatever your company can afford to pay you because you rolled the dice and took significant personal risk.

            Good on you. You should be rewarded for that.

            But what about the guy who comes in after you? The successful business already exists. The loans aren’t in his name because they’ve already been paid back. It was never his reputation on the line, and his good name is secure because the company is named after you, not him.

            He’s walking into a sure thing and taking on precisely zero risk whatsoever, just like every single one of these GM executives. He needs absolutely no ideas whatsoever; he just needs to steer the course you’ve already charted. What possible claim does he have to the rewards commensurate with someone like you, who actually did take risks and build something new? Not a single one of the executives we’re talking about here has ever done anything as risky as what you did by starting your own practice.

          • PunditGuy says:

            Completely serious question: Do you think that Japanese CEOs are of significantly lower quality than their American counterparts? What about Chinese CEOs?

    • dragonfire81 says:

      That was tried already by capping CEO pay. Now CEOs are paid in large part by stock options, which encourages them to sacrifice anything and everything to get the bottom line up and get more money in their pockets. And of course there’s all the other perks.

    • zzyzzx says:

      “However, the problem is not that GM is underpaying; it’s that everyone else is overpaying. Fix it across the board.”

      I agree with the above statement.

  15. alstein says:

    Maybe they can outsource their CEO jobs to the same countries our jobs get outsourced to.

    I’m sure a Vietnamese CEO could do almost as good a job as an American CEO, and think of the saved money.

  16. JG2002 says:

    they should let them pay more, but all based on performance…

  17. rpm773 says:

    That statement should make for an awkward executive staff meeting come Monday morning.

  18. kaplanfx says:

    Wait, you are saying an executive wants permission to pay executives more? Maybe if this was an outside consultant or something, but how can you trust a guy who stands to benefit from the very increases he is suggesting.

    • DerangedKitsune says:

      Well, if there’s anyone who knows the importance of being able to approve your own (outrageous) raises, regardless of economic conditions or cuts to the rest of an organization, it’ll be a politician.

  19. ludwigk says:

    Dear GM,

    Don’t worry. Numerous psychological and economic studies show that pay does not motivate performance or talent above certain levels, which are extremely modest by executive standards. Additionally, empirical evidence from hundreds of companies confirms this. Higher pay does not correlate with higher performance in any field. You and your company will be fine without the raises.



    • partofme says:

      Citations? I’ve seen studies that say the point is to pay enough to take the issue of money off the table, and then people can get down to work. But there is the problem. If GM is paying execs much less than they could get on the open market, then the issue of money is still on the table. I’ll take your studies and raise you a much more classical concept: prospect theory. You may think that once income reaches a certain level, it suddenly doesn’t matter at all… but you’d be wrong.

  20. AI says:

    They were able to afford ‘quality’ executives before the bailout. See how that worked out?

  21. Mecharine says:

    Professional CEO’s are not always great. They come into the job with preconceived notions of how it operates, and due to the personality needed to be a CEO, they often adamantly follow counter intuitive plans and procedures. It happens often with large corporations.

    The best scenario would be if GM promoted one of its long term employees to positions of power, because they have vested interest in the long term solvency of their company.

  22. 72Riv says:

    Here’s an idea… any raise, bonus or other incentive given to an executive should be met with an exact proportional raise, bonus or other incentive for every single employee of the company.

    If you cut any employee group’s salary, bonus, pension, or other incentive, the executives’ should be proportionally cut.

    • TuxthePenguin says:

      You do realize that a policy such as that is going to screw the company beyond all measure for increases, right?

      There is a reason you cannot find a bare-bottom janitor making $150k a year – the skills required are just too plentiful to demand a high salary. At some point, you start asking yourself why you’re paying this janitor $150k when you can get a guy off the street that can do just as good of a job for $30k.

      I think executive pay is a bit over-the-top, but there are reasons for that built into the system – mostly due to financial disclosure and the tax system – most of executive pay is built into the form of bonuses… that they might or might not get. So they want a bigger upside to hedge that uncertainty. (Economic theory holds that if you had a choice of 100% chance of $100 or a 50/50 chance of $200 or 0, most would take the certain outcome rather than risk “losing”)

      • 72Riv says:

        Yes, I realize that. But it would also help keep CEOs from making as much in a few hours as the average employee makes all year. There is absolutely no reason why a CEO deserves to make more than $400,000 or $500,000 a year.

        I’m thinking of protecting workers from cut benefits while executives get massive bonuses. That is ludicrous.

        • TuxthePenguin says:

          Ever run your own company? Trust me, there are times of my year that I wonder why I bother with my own practice.

          Most of the increase in pay is due to competition – SEC requires the top five executive pay to be disclosed in total… but its fairly easy to figure out what each makes or at least an average – and the tax code – only $1m of salary is tax deductible, but board-approved bonus-plans (with some restrictions) are fully. The former makes it easy to see what your competition is making, the latter causes higher pay to offset the risk of not getting the pay.

    • qwickone says:

      I like it! But it would never fly – how are the rich going to keep getting richer while the poor get poorer if we do that??

      • 72Riv says:

        They always scream about redistribution of wealth, but that is exactly what they are doing… in a very big way. They get 20-50% bonuses and raises every year while this year is the first time in 4 years I’ll be getting a raise… (about 1%-2%). If that isn’t redistribution of wealth, I don’t know what is.

  23. oldwiz65 says:

    GM is never going to recover from the mess they got themselves into. They will continue to waste government money and produce crappy cars. They just want to give their executives more money which they don’t even deserve in the first place. Executives looking for top level jobs are far far more concerned about big bonuses that are not dependent upon performance; that way they still get huge amounts of money even if the company goes down the tubes.

  24. TasteyCat says:

    Are they seeking executives of the same quality as those who forced them into bankruptcy? Sure, they can blame the economy, but Ford and Toyota didn’t seem to need to go bankrupt and be bought out by the government.

  25. Blious says:

    It shows what pathetic leadership they have that their already ridiculous salaries aren’t “enough” in their eyes

    Most companies would DIE for what they pay yet these douchebags are wanting to spend like Wall Street

    No way, No how

  26. nosense22 says:

    Newsflash… the pay isn’t the issue, living in Detroit is.

  27. dush says:

    You mean like all those good people who got the company into problems in the first place?

  28. KyBash says:

    If they’re losing executives, it’s because those people who signed on thinking they could grow with the company now see there’s no real future there.

  29. rndmnmbr says:

    So, someone remind me here, what do executive do that makes them worth a couple million dollars per year? As far as I can tell, it’s a whole lot of nothing.

  30. shadowhh says:

    Does he maean he wants to bring it the great-highly paid ones, that drive the company into the ground? Those good ones?

  31. EverCynicalTHX says:

    Once they pay back all the money they owe US they can make their own compensation decisions.

  32. polishhillbilly says:

    Put the money towards engineers that think out of the box, and will actually design and build cars that appeal to all Americans. start building them for longevity, not expendability.
    Pay increases to executives will not solve a thing.

  33. mythago says:

    Starting to lose them to whom? Ford? Toyota? Who are these stellar executives who flocked to GM and then freaked out when they looked at their pay packages?

  34. flbas says:

    20% of america is out of work and you can’t find one?

  35. vdragonmpc says:

    Its utter BS. Too many Hah-vaid graduates that think they are entitled to insane pay. Clues have been coming for years that companies need to focus on their core product or service. Most executives seem to have the ‘make it big and buy everything’ so their options pay more.

    Its resulted in vast destruction of resources all over. Look at the mess at HP, Dell, AOL, GM, Dodge and other large corporations employing CEOs disconnected from reality. A big issue is that people paid that far out of reason. They dont know what people want and have no idea how to motivate or innovate their companies.

    Look at the stupidity that goes on in car interiors made by GM vs a cheap Hyundai
    Look at the idiocy at network stations and then look up ‘reality TV’
    Dont even consider the junk that Dell calls support.
    What not buying the product we will just raise the price until its profitable… Oh wait…

  36. JollyJumjuck says:

    Oh those poor, underpaid and unappreciated executives! Maybe someone should set up a fundraiser to help them through this bitter winter. We’ll call it Yachts for Yobs.

  37. esc27 says:

    Are they also going to pay their workers more to get the best quality mechanics, assembly line workers, etc. or does “quality” on count among executives.

  38. areaman says:

    “The top executive at General Motors says the company was humbled by its “near-death experience”

    In the news this morning I saw this headline. If they were humbled they sure don’t act like it.

    If fact I would say they got hit by the d-bag beam which is making them act like d-bags.

  39. VashTS says:

    What GM will do is higher someone who is related in someway. Like Presidents, you know keep it in the family. Hire someone, who is part of their Bilderberg type group and laugh at the poor hacks who actually work.

  40. axiomatic says:

    Dear GM,

    Hire more worker bees with the money you want to give to these executives. You’ll get more done and you’ll feel better about it while doing the right thing for the economy.


  41. livingthedreamrtw says:

    Executives should be paid solely in company stock or at the very least, a small base salary ($100k or under) topped off with stock. Company does well, executive wins. Company fails, executive fails. Lets put that in the whole reform business that is going on now. Get a detailed pay and withdrawal plan that wont let executives sell all their stock before the ship sinks.

  42. suez says:

    Gee, if only MY bosses fought this hard for bonuses for me…
    How come this whole “we must remain competitive” theory only applies to those in the corner offices?

  43. buddyedgewood says:

    Like many others out there, I’m a GM shareholder – of the original stock (now with the stock symbol MTLQQ – Motors Liquidation) – and this request from them just boils my blood. Especially since they just IPO’d a new stock (GM) and pretty much threw the original stock in the shitter. FU General Motors!

  44. TouchMyMonkey says:

    Just think – the guy who installed the front suspension on your new Chevy might have been one of those guys they hired for $14/hr. Hope you got AAA.

  45. MrEvil says:

    It seems that in other parts of the world and in other more successful companies Executive pay is less cash and more ownership stake in the form of stock awards. Which I think is the best preventative measure to keep out the sinking ship CEOs. If more of the Executives’ wealth lay in stocks then it’s in their best interest to NOT do things that could potentially bankrupt the company.

    The only types of executives that you’re attracting with these large in-cash salaries is the types that are much more likely to run the company into the ground while stuffing his own pockets at the same time.

    The CEO at my company (a global firm that is ubiquitous in semiconductors) makes 3/4 of a million in salary but undoubtedly gets a large amount of stocks awarded to him every year. He’s not running the company into the dirt on short-term gains in order to line his pockets. He’s looking ahead to ensure his stock is worth something in the future.

  46. Pig_Farmington says:

    I didn’t know “quality executive” could exist as a phrase.

  47. Pig_Farmington says:

    I didn’t know “quality executive” could exist as a phrase.

  48. Peggee is deeply offended by impetulant, pernicious little snots disrespecting her and violating her personal space at Best Buy. says:

    Right, because paying your executives more worked out so well last time around.