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From the Detroit Free Press:

Wagoner's total pay cut in half

Automaker withholds top GM bonuses

April 29, 2006

BY MICHAEL ELLIS

FREE PRESS BUSINESS WRITER

General Motors Corp. cut Chief Executive Officer Rick Wagoner's pay by 46% to $5.48 million for his work last year, which he said was one of the most difficult in the 98-year history of the automaker.

According to GM's federal proxy report released Friday, GM's board of directors withheld any bonus to Wagoner and the other four top executives at the automaker due to the poor results in 2005, when GM posted a net loss of $10.6 billion.

The GM board, which sets pay and compensation levels for the automaker's top executives, praised Wagoner's strong direction and steady leadership performance last year in developing a plan to return the automaker to profitability. Nonetheless, the board said the automaker failed to perform to expectations last year.

Wagoner's base salary remained unchanged at $2.2 million last year, according to a federal filing.

Wagoner also received options for 400,000 shares valued at $2.9 million and $395,000 in other compensation, including use of company aircraft, security services, contributions to a savings plan and other items.

In 2004, Wagoner was paid a bonus of $2.5 million, and the stock options for 400,000 shares were valued at $5.1 million. His other compensation in 2004 totaled $265,855.

In a letter to shareholders included with the GM annual report, also released Friday, Wagoner said, "I am confident that we'll emerge from these challenging times stronger, smarter and a better global competitor.

"We will succeed," he concluded.

In February, Wagoner and the other top GM executives took a voluntary pay cut for 2006 as part of sweeping measures to cut benefits for salaried workers across the company. Wagoner took a 50% cut in his base salary of $2.2 million.

GM also said Friday that company shareholders submitted six proposals to change company bylaws or policies. Shareholders will vote on the proposals at the GM annual meeting, scheduled for June 6 in Wilmington, Del.

The shareholder proposals, opposed by the GM board of directors, include measures that would change voting procedures for the board, split the offices of chairman and chief executive officer, prohibit the issuance of more stock options to GM employees and require the issuance of a new report on GM's impact on global warming.

One proposal says GM should recover performance bonuses paid to senior executives because the automaker had to restate its financial results in previous years after discovering accounting errors.

"There is no excuse for over-compensation based on discredited earnings at any company," the proposal says.

The GM board, which opposes the measure, said its current guidelines and antifraud laws already address those concerns.

Top executive pay at GM

*

Rick Wagoner, chairman and CEO

* Total compensation: $5.5 million in 2005, down from $10.1 million in 2004.


Bob Lutz, vice chairman, head of product development

* Total compensation: $3 million in 2005, down from $6.5 million in 2004.


Thomas Gottschalk, executive vice president, law and public policy

* Total compensation: $2 million in 2005, down from $2.9 million in 2004.


Gary Cowger, group vice president, head of global manufacturing

* Total compensation: $1.7 million in 2005, down from $2.2 million in 2004.


John Devine, former vice chairman and chief financial officer

* Total compensation: $3.9 million in 2005, down from $6.4 million in 2004.
 
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