GM CEO Mary Barra with her Ford counterpart Alan Mulally during last week's black tie preview at the North American International Auto Show.
(This story has been revised to reflect additional comments by General Motors on its executive compensation strategy.)
There have been countless surveys over the years that find women in the workforce make less money than their male counterparts and, apparently, that’s true at even the highest levels — including the new chief executive officer at General Motors.
GM has revealed that its new CEO Mary Barra stands to earn as much as $4.4 million in her first year on the job. That’s if she collects on the full $2.8 million that’s set aside as part of a short-term incentive plan. (She also could collect a potential $1 million in a new stock offering.) But Barra’s base salary is $1.6 million – a full $100,000 less than outgoing CEO Dan Akerson made in 2012 and 2013.
And Akerson will continue to out-earn Barra, at least for the time being. Though he retired last week – months ahead of the original plan due to his wife’s serious bout with cancer – the former Navy pilot will remain a GM consultant for which his base salary will be larger than Barra’s, according to GM documents filed with the Securities and Exchange Commission.
“There has been important, significant progress for women” in terms of reaching pay equality, noted a new study by Stanford University titled “The Gender Pay Gap: Have Women Gone as Far as They Can?” But the report cautions, “There is still a gender pay gap. Women continue to earn considerably less than men on average.”
(Click Here for a closer look at GM’s new CEO Mary Barra.)
Barra’s new job places her at 26th on the list of the best paid automotive “Captains of Industry,” according to research by trade publication Automotive News, behind Thomas Lynch the CEO of supplier TE Connectivity – which generated barely 8% of GM’s total revenues in 2013. Lynch took home $4.7 million.
Even including the potential $1 million in stock the GM board could award Barra she only moves up to 24th on the automotive CEO list, behind the $5.7 million paid to engine maker Cummins’ chief executive Thomas Linebarger.
Ford CEO Alan Mulally topped the chart, with a total compensation package of $68.4 million for 2012, the latest year for which data was available.
GM spokesman Greg Martin insists there’s no issue of gender inequality involving Barra’s pay. He notes that only two aspects of her total compensation package have so far been announced: her base pay and her short-term compensation. Barra stands to receive more in long-term compensation, with the company’s board of directors set to vote on that package at their annual meeting in June.
Meanwhile, he notes that the figures are a bit misleading since Akerson’s compensation was “heavily weighted to the short-term…which had everything to do with the fact that he wouldn’t be there very long.” As to the fact that the former CEO will continue getting a larger base salary as he continues as a consultant, Martin said the actual figure is likely to be “pro-rated” depending upon how much time Akerson puts in for GM.
Don’t feel too sorry for Barra, however. Had she been promoted last year she might have made significantly less money. General Motors was, until last month, subject to significant restraints on the pay it could award its top executives, part of the terms of the federal bailout that helped the maker pull through its 2009 bankruptcy. The government sold off its last shares of GM stock in December, which meant the pay cap was lifted.
For 2012, however, former CEO Akerson still took home $11 million when stock awards and other bonuses were added in. And he will continue to earn $1.7 million annually as a consultant to the automaker.
Akerson himself lagged far behind Mulally and some of the other executives on the Captains of Industry list but downplayed that shortfall during a farewell appearance at a Detroit automotive conference last week, describing his reasons for coming to Detroit as a patriotic effort to save one of the country’s most important manufacturers.
(Akerson opens up. Retired GM CEO reveals the challenges of saving a bankrupt GM. Click Here for more.)
For her part, Barra has not commented on the pay gap.
The 52-year-old has been working for the automaker since she started an internship at the old Pontiac Assembly Plant at 18, while studying at the General Motors Institute, now known as the Kettering Institute. She has become the first female CEO of any major automotive company.
(What a concept! Show cars pack them in at the 2014 Detroit Auto Show. Click Here for a look.)