Former GM Chairman and CEO Rick Wagoner — ousted by President Barack Obama in March — will collect an $8.2 million exit package, plus a $74,030 annual pension, according to a filing Tuesday with the U.S. Securities and Exchange Commission.
That’s far less than what Wagoner, 56, was originally due before then-bankrupt General Motors Corp. last month outlined drastic cuts in pensions for some former high-level executive retirees as part of broad cost-cutting moves.
Wagoner, a 32-year veteran of GM, had a pension with total retirement benefits of about $20 million, according to a March regulatory filing. In all, Wagoner will take a more than 60 percent cut to the current value of his retirement benefits.
That’s consistent with cuts made to other retired executives. GM pension recipients who receive a total yearly payment of $100,000 or less will lose 10 percent of their payout. But former executives who collect a higher pension are seeing pension payouts reduced by two-thirds.
Under an arrangement reached between Wagoner and the old GM, he will receive $1.63 million annually for five years and $74,030 a year for the rest of his life.
Wagoner, who was fired by Obama as part of the automaker’s restructuring, remains on the payroll at $1 a year and will officially retire Aug. 1.
He also will receive personal umbrella liability insurance coverage until Jan. 1 — consistent with what other retired executives are receiving. Wagoner, who became CEO in 2000 and added the title of chairman of the board in 2003, also will get an existing life insurance policy or its cash value of $2.57 million.
The retirement agreement was assigned to the new GM in conjunction with an asset sale approved last week by a U.S. bankruptcy judge.
Wagoner’s total compensation since 2003 has been about $65 million, including $40.2 million over the past three years.
But amid a steep drop in the company’s stock price, the stock and options the automaker awarded to Wagoner declined dramatically. He was awarded $11.9 million in stock and options in recent years, but the actual value as of Dec. 31 was $682,000.
GM shares plunged even further in the months before the automaker filed for Chapter 11 bankruptcy June 1.
General Motors Co. emerged from federal bankruptcy court on July 10 after a rapid restructuring and $50 billion in federal aid.
GM also disclosed the identities of additional members of the old GM’s board of directors.
The old GM — now known as Motors Liquidation Co. — is headed by President and CEO Al Koch, who is vice chairman and managing director of restructuring firm AlixPartners. Koch is handling the sale and liquidation of the old company’s assets, such as the Pontiac, Hummer, Saab and Saturn brands.
On the board, he is joined by James Selzer, who is vice president and treasurer of the old GM. Selzer also is a director in the corporate turnaround and restructuring practice of AlixPartners.
Koch and Selzer will be paid $835 an hour and $555 an hour, respectively, filings show.
Their affiliated firm, APServices LLC, is entitled to a $13 million “success fee” since U.S. Bankruptcy Judge Robert Gerber approved the GM asset sale. The company also may be paid an undetermined fee by old GM, according to the regulatory filing. The financial terms are being discussed and are subject to approval by the bankruptcy court.
This month the old GM elected five new directors who will serve on the company’s board. They are: Stephen Case, who founded AOL but is no longer associated with the company; former Chrysler Group President James Holden; and Alan Johnson, Alan M. Jacobs and Wendell Adair.
The directors will be paid a $50,000 annual retainer, plus $3,000 per meeting.
The old GM will file periodic reports with the SEC outlining liquidation payments, expense amounts and other data.
Harvey Miller, GM’s bankruptcy lawyer, told Bloomberg Television on Tuesday that he expects the Obama administration’s auto task force to be disbanded in the next six weeks. “I really believe that by the end of August, the task force will be gone,” he said.
But administration officials have said the auto task force could be in business for several months.