GM Chairman and CEO Akerson won't be able to cash out for several years.
General Motors Chairman Dan Akerson is getting a big payday – though he won’t be able to cash the check for a couple of years.
Akerson, who also serves as GM’s chief executive has been awarded 76,249 shares of restricted stock, according to paperwork the maker has filed with the federal government –which still owns about a third of GM’s stock and has oversight on pay issues for the company’s top executives.
Based on the recent price range for GM stock that would work out to somewhere around $2 million — $1.94 million, to be precise, based on what the shares closed at on Monday. But if GM stock comes close to the $33 it commanded when the maker held its November 2010 IPO that would add more than $500,000 to the payout.
Akerson will have time to wait and see, as he cannot cash in for several more years. He can convert two-thirds of the award to common stock on March 15, 2014 and the rest a year later. And he will have to remain a continuous GM employee for the duration or risk losing his stock bonus.
While the potential value is significantly more than what the average GM line worker makes – total pay and benefits coming in at just over $50 an hour under the contract negotiated last year – Akerson’s stock award was dwarfed by what cross-town rival Ford Motor Co. provided its CEO Alan Mulally.
The former Boeing executive received 376,016 restricted stock units as part of a long-term pay package, which Ford valued at $58.3 million. Of course, as with Akerson, the actual value could rise or fall sharply depending upon where the stock market is when Mulally cashes in. Ford stock opened Tuesday at $12.63 a share, but has ranged from $9.05 all the way up to $16.18 over the last 52 weeks.
GM has yet to reveal Akerson’s total pay package. Last year, he received pay of $2.53 million, but stock and other compensation brought the total closer to $9 million.
The other member of the Detroit Big Three CEO club, Chrysler’s Sergio Marchionne, waived all pay and bonuses for 2011 – but he won’t be going hungry. Marchionne took home 14.5 million Euros, or $18.9 million, last year from Chrysler’s Italian partner, Fiat. That included $3.2 million in salary and another $15.69 million in stock that vested in 2011.
Major companies like Ford and Fiat like to use stock as an incentive, the argument being that with enough shares an executive like Akerson, Marchionne and Mulally will be motivated to maximize investor value.
The challenge for GM is that it has had to run any pay package for its executives by a federal overseer as part of the carmaker’s 2009 bankruptcy bailout. Chrysler was subject to similar limits until paying off the rest of its government loans last year.
Among the other GM executives to be covered by the maker’s SEC filing:
- Vice Chairman Steve Girsky was awarded 57,187 restricted stock units;
- Mark Reuss, president of GM North America received 44,415;
- As did Tim Lee, head of International Operations;
- Karl-Friedrich Stracke, appointed CEO of troubled German subsidiary Opel last year, was awarded 21,541 units of restricted stock;
- Mary Barra, the maker’s first woman global product development chief, took home 53,374; and
- Global marketing chief Joel Ewanick and PR czar Selim Bingol each were awarded 12,582 restricted shares.