Michigan Congressman Sander Levin opposes lifting pay caps to attract a new General Motors CEO.
The search for a new CEO to replace ousted General Motors Chief Executive Fritz Henderson could be seriously complicated by the federal pay cap on companies that have received a government bailout.
As things stand, a new CEO would be limited to less than $1 million in hard cash. While that might be a big lure to the average American, it’s a pittance in the corporate world, especially among Fortune 500 companies, industry analysts warn. But there seems little likelihood that the cap would be lifted, contends influential Democratic lawmaker Sander Levin.
“I doubt if there would be a change to the pay cap,” the Michigan congressman tells TheDetroitBureau.com, even though critics point to the millions of dollars Ford Motor Co. shelled out to attract former Boeing executive Alan Mulally, to sign on as its CEO.
Cong. Levin says he believes that, “There are other ways to compensate executives, including stock. More and more, we want people compensated for performance. GM should be able to attract someone within the pay cap and if they succeed, they will be compensated adequately. If they fail, they won’t.”
The Michigan Democrat says he was totally “surprised” by the ouster of Henderson by the newly activist General Motors Board of Directors. But he also said it was appropriate that GM not give any advance notice to the White House, despite the fact that the U.S. Treasury owns a majority stake in the post-bankruptcy automaker. “The President has made it very clean,” said Cong. Levin, “that it does not intend to be involved in the daily management of GM.”
The ouster of Henderson was engineered by GM’s new Board Chairman Ed Whitacre, Jr., who will serve as Acting CEO until a replacement is found. The automaker’s Vice Chairman Bob Lutz said, last week, following a speech at the L.A. Auto Show, that GM is looking outside, much as Ford did. Experts say the selection process could take six months or more.
Meanwhile, Cong. Levin said he also believes that Washington should stay out of the ongoing debate over the planned cuts in GM’s – and Chrysler’s – dealer network. The congressman said he does not expect lawmakers to pass any of the proposed measures, which would force the two companies to restore the thousands of dealers they’re eliminating.
“It has to be resolved between the dealers and the companies,” asserted Cong. Levin. “I think there will be no action” on the part of lawmakers.
Last week, GM and Chrysler proposed a compromise that would spell out their reasons for eliminating each dealer – and create a process for dealers to challenge, and possibly reverse, those decisions.