GM Chairman and CEO Dan Akerson will seek no pay hike for 2013, the maker insists.
With a Congressional oversight committee set to review pay policies for companies covered by federal bailout funds, General Motors says it will not ask for an increase in the compensation package for Chairman and CEO Dan Akerson.
It had been widely reported that the maker would seek a 20% boost in the executive’s pay for 2013, which would bring it to a total of $11.1 million, according to documents quoted by the Detroit News. In fact, GM said in a statement issued this morning, “Reports that General Motors has requested an increase in Dan Akerson’s 2013 compensation are false.”
The maker says the CEO will again receive a package totaling $9 million, matching his 2013 pay which included both bonuses and $1.7 million in base salary.
“Unfortunately, someone who obviously did not understand the compensation request leaked the information in a way that misrepresented the truth in order to score political points on the eve of a congressional hearing,” the automaker said in a statement this morning.
That means Akerson will continue to be the lowest-paid of Detroit’s Big Three CEOs, with both Ford Chief Executive Alan Mulally and Chrysler CEO Sergio Marchionne taking home more than $20 million each – though Marchionne’s package includes money he earned as CEO of Chrysler’s Italian partner Fiat SpA.
(Click Here for the original report on Akerson’s pay request.)
The pay for more than two dozen of GM’s top executives is subject to government approval under terms of the federal bailout that rescued the maker in 2009 following its bankruptcy. Executives at other companies that have yet to pay back their federal assistance are also subject to pay caps under the provisions of the so-called TARP, or Troubled Asset Relief Program, approved by Congress in 2008 to rescue the banking industry following the collapse of Lehman Brothers.
After lawmakers declined to pass a separate automotive bailout bill, the George W. Bush White House tapped TARP for money to help prop up GM and Chrysler, as well as Ally Financial, the former GMAC, and Chrysler Financial. The Obama Administration expanded the automotive bailout after assuming office in 2009.
The pay caps have proved highly controversial, opponents claiming it actually hurts the companies subject to oversight. GM CEO Akerson, for example, has claimed he gave up “more than” $100 million when he left the investment fund the Carlyle Group to run GM in 2010.
On the other hand, “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,” said a recent report from the office of Christy Romero, the special inspector general overseeing the $700 billion TARP.
Romero has criticized the actions of Treasury’s acting pay czar, Patricia Geoghegan, who recently loosened the purse strings for a number of executives covered by the TARP restrictions.
The U.S. House Oversight and Government Reform Committee will hold hearings today to examine the pay restrictions. Akerson and other executives covered by the TARP guidelines will not attend the session.
While I don’t doubt that Mr. Akerson has earned his pay or the chance to be comped at a similiar level as his counterparts in Michigan, seems like this is bad timing. With the sequester looming and Cristy Romero’s pitch today….looks like a tough sell.
If you didn’t catch the follow-up story, JT, GM is saying Akerson WON’T be asking for a pay hike. Did the original report in the Detroit News get it wrong or did GM read the tea leaves and quickly reverse course? Haven’t been able to get an answer yet but an interesting story, nonetheless.
Paul E.
There is no CEO worth $9 Million per year, not even Tim Cook. If you look at compensation for equal sized companies in Europe, the CEO’s make way less than in the U.S. which over-compensates their executive staff even when they destroy the company…
The day any CEO actually “earns” a million dollars per year is a long ways off. It’s not like these people are rocket scientists. They are wrong as much as they are right with strategic planning and that is basically all they do other than represent the company and make PR speeches.
They do make less though you will notice that their compensation rates have gone up significantly since the DCX “merger of equals.” It’s just that US CEO compensation has gone up even faster.
Paul E.
Paul, so the follow-up to the follow-up is now that Akerson already received the increase. Which was 2M more than what was allowed, correct? The other curious issue is that he also purchased stock. Were those any of the 300M shares that the Treasury still owns?
@Jorge M….did see Alan Mulally’s comp?
I’m, still trying to get this all down…LOL.
Paul E.