GM Chairman and CEO Dan Akerson testifying before Congress last year.
General Motors Chairman and CEO Dan Akerson could see a 20% increase in his paycheck for 2013, total compensation jumping to $11.1 million – if he can get the numbers approved by the U.S. Treasury Department.
As one of the top executives at GM, Akerson’s pay must be approved by Washington under terms of the automaker’s 2009 bankruptcy bailout – another reason why insiders say GM management is anxious to shed federal oversight as the Obama Administration moves ahead with plans to sell off its remaining stake in the maker by early 2014.
Akerson’s proposed paycheck compares with a $9 million package in 2012 that included bonuses and $1.7 million in salary. The one-time telecomm industry executive is currently 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.
GM would not comment on Akerson’s pay proposal but the Detroit News confirmed the numbers through documents it obtained from the maker. They show that GM wants permission to raise the salaries of 18 of its top 25 executives. The automaker has complained that it needs to offer more lucrative incentives to keep current managers and attract new ones who might otherwise bolt for better offers from the competition.
The proposal will be brought up during a meeting today by the U.S. House Oversight and Government Reform Committee which is looking at executive pay on companies that received federal bailouts in 2008 and 2009.
The money was originally authorized under 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 cap has become an issue of debate, 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.
Such claims have apparently swayed Treasury’s acting pay czar, Patricia Geoghegan, to loosen the purse strings. But Christy Romero, the special inspector general overseeing the $700 billion TARP, has been critical of the recent pay hikes approved for various executives covered by the program.
“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 Romero’s office.
Though company officials won’t testify during the Oversight Committee hearing, the outcome of today’s meeting could determine whether Akerson gets his proposed raise.