By on February 26, 2013

GM’s CEO Dan Akerson asked for a big raise. He thinks his work at GM is worth a paycheck of $11.1 million this year, up 20 percent from last year,  Reuters reports, citing documents. The embarrassing part: Akerson and GM have to ask its white House sugar daddy for approval.

As part of GM’s government-funded bailout, the salaries of  GM executives must be authorized by a special paymaster from the federal government. The request for a raise comes at an inopportune time.

Last month, the special paymaster faced strong criticism from the TARP Special Inspector General . The report said the government “continues to award excessive pay packages.” It also flogged executives who “continue to lack an appreciation for their extraordinary situations and fail to view themselves through the lenses of companies substantially owned by the U.S. Government.”

The report published the 2012 pay packages of executives of bailed-out companies and said:

“In stark contrast, the 2011 median household income of U.S. taxpayers who fund these companies was approximately $50,000.”

Akerson’s request for a pay raised is part of documents that were published a day before a U.S. House Oversight and Government Reform Committee would be looking into whether the U.S. Treasury has allowed excessive executive pay at companies aided by the Troubled Asset Relief Program.

Meanwhile in Germany, Volkswagen CEO Martin Winterkorn applied for, and received, a salary reduction.  Based on Volkswagen’s record $29 billion profit, Winterkorn was entitled to a bonus that would have raised his  2012 remuneration to €20 million ($26 million.) Last week,  Volkswagen’s supervisory board ruled that Winterkorn will be paid a total of 14.5 million euros ($19.17 million) for 2012 in fixed salary, bonuses and incentives, compared with 17.5 million a year earlier.

Winterkorn’s private taxi

A U.S. Treasury Department official said no determinations has yet been made for the 2013 compensation of GM execs. Once the government is out at GM, no more embarrassing requests for raises.  Also, GM execs will get their jets back. This must be the most embarrassing part: While RenCen execs must fly commercial, Winterkorn has his private Airbus A319CJ, along with a fleet of Dassault Falcons.

In the meantime, GM spokesman, manager of News Relations and GM Media Online, Alan Adler said:

“Reports that General Motors has requested an increase in Dan Akerson’s 2013 compensation are false. In fact, Dan specifically asked to keep his compensation at the same level for 2013 as it was in 2012 and 2011. That amount of $9 million is what the company submitted to the Office of the Special Master for TARP Executive Compensation.

Unfortunately, someone who obviously did not understand the compensation request leaked the information in a way that misrepresented the truth in order to score political points on the eve of a congressional hearing.”

Adler asked “that media outlets, including TTAC, that reported the false story correct the record.” Done!

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36 Comments on “Dan Akerson Wants a Big Raise, Washington Sugar Daddy Not Sure Yet, GM Says: Not True!...”


  • avatar
    MrWhopee

    I think that man should be called in front of a Senate hearing, and grilled about his reasons for asking for the raise. And if he can’t answer satisfactorily, be immediately dismissed.

    • 0 avatar
      Stumpaster

      That’s very wasteful of our Senate’s resources. Why invite a farce? What is he gonna say, um I just thought I could use more cash and you gots the cash? Nah, beat him with an ugly stick till he cries, then fire him for being obnoxious, then make him drive a Buick with fake hood vents for the rest of his life.

  • avatar

    In these days of restraint, I hardly think that this raise is worth it?

  • avatar
    mike1dog

    I think you left a decimal point out of Winterkorn’s potential salary, I believe it is $21.6 million, not $216 million.

    • 0 avatar

      Actually, the typo was worse. Thank you for the catch.

      • 0 avatar

        I work in GM Media Relations. Here is our statement about Dan Akerson’s pay:

        Reports that General Motors has requested an increase in Dan Akerson’s 2013 compensation are false. In fact, Dan specifically asked to keep his compensation at the same level for 2013 as it was in 2012 and 2011. That amount of $9 million is what the company submitted to the Office of the Special Master for TARP Executive Compensation.

        Unfortunately, someone who obviously did not understand the compensation request leaked the information in a way that misrepresented the truth in order to score political points on the eve of a congressional hearing.

        We ask that media outlets, including TTAC, that reported the false story correct the record.

        • 0 avatar
          thelaine

          You owe me 40 billion dollars.

        • 0 avatar

          Leaked? All due respect, the SIGTARP report on executive compensation is a publicly-available document which states:

          “GM officials complained about the pay restrictions in their 2012 proxy statement and in a meeting with the Treasury Secretary. In March 2012, weeks before the Acting Special Master set the 2012 pay packages, GM CEO Akerson met with Treasury Secretary Geithner, without the Acting Special Master, asking Treasury to release GM from OSM’s pay limits by lifting the more onerous TARP exceptional assistance pay restrictions that led to OSM’s jurisdiction.

          Secretary Geithner rejected GM’s request. On April 26, 2012,
          GM filed a proxy statement stating that pay for GM’s CEO was not high enough and that the TARP pay restrictions restrict GM from paying its executives sufficiently. In the proxy statement, GM complained about being limited to long-term restricted stock for incentive pay, rather than cash bonuses, and claimed that its inability under TARP to offer a competitive mix
          of cash and stock became an area of increasing concern. In particular, GM noted concerns with using restricted stock for several senior executives, including CEO Akerson, the chief financial officer, an executive of GM Europe, and others”

          Does this report, by a government watchdog, “misrepresent the truth?” It’s one thing to tell the media they aren’t doing their job well, calling the Treasury Secretary and the SIGTARP liars on top of it all is quite the bold step. Care to comment?

        • 0 avatar
          Off a Cliff

          Good to see this. Thank you.

    • 0 avatar
      PenguinBoy

      I suppose it’s valid to compare Winterkorn’s salary to Akerson’s. Both work for government owned automakers…

  • avatar
    raph

    Heh… Akerson must be feeling the effects of inflation, whatever is he going to do making only about 9 million a year.

  • avatar
    mcarr

    Did I miss something? What has he done to deserve a raise?

  • avatar
    thelaine

    I say pay him. Also, we should get him a private jet. Not just a business jet, but one he can party in. It is a damn shame that the Hollywood types and rappers are living larger than America’s CEO. Now that we own GM, he is a symbol of our country. We cannot afford to show weakness, especially to the Canadians. They are always poised at our border, ready to mush across and conquer our defenseless maple syrup industry. To some it may seem wasteful, but a diamond-studded, pimp-daddy Akerson is the price of vigilance against our aggravatingly polite, passive-aggressive northern neighbor. Anyway, money is no object. We can always just print more.

  • avatar
    gessvt

    I’d suggest that Dan “tighten his belt” until GM stock doubles in price.

    • 0 avatar
      CJinSD

      Equities are already about 40% overvalued due to this regime’s mechanisms of quantitative easing and manipulation of inflation indices. GM’s stock will double when Obama wipes out another 50% of Americans’ savings, which is another reason his cronies are hoarding 8 and 9 figures at a gulp instead of 7.

  • avatar
    sunridge place

    Hmm

    http://media.gm.com/media/us/en/gm/news.detail.html/content/Pages/news/us/en/2013/Feb/0226-akerson.html

  • avatar
    Zackman

    I haven’t had a raise since 1996, when I joined another company, and took a slight cut 5 years ago at my present company to remain gainfully employed when my old job moved to New Hampshire. 1-2.5% “cost-of-living” increases don’t count, either. Those have disappeared, too, by the way…

    I’m very happy and content to be working a real job at my age, so I’m with “Buickman” on letting this guy hit the bricks ASAP!

    Of all the audacity someone already rich has in asking this! Yeah – give him a raise after he pays back every red cent of the money the gov’t gave GM, THEN give him a raise AFTER all those who sacrificed to keep their jobs for the survival of the company.

    (NOTE: the following IS NOT a political statement, but an observation)

    I can really understand why so many working people hate one political party over the other in this country, as the little guy seemingly continues to get kicked in the shorts at every turn.

    • 0 avatar
      doctor olds

      Bring some facts and logic to bear. Akerson has specifically requested no pay raise for several years. He is on the low end of auto executive compensation, and the company has made $16Billion in the past two years.
      More significantly, don’t forget that Whitacre and then Akerson were brought in to lead GM after all the old executives were fired . Neither were part of the “GM culture” so many imagine they know as the cause of the financial collapse.

  • avatar
    SVMaldemer

    Watch them turn around and demand the unions take a cut in pay and benefits. In three, two, one…

  • avatar
    Rday

    Just another reason to have nothing to do with GM or any of its’ products. Buying anything from GM just supports this corrupted/immoral company. All of the execs need to be fired and have new people brought in. And their wages are ridiculous. What an insult to the American tax payer.

  • avatar
    BrianL

    Honestly, I think the pay restrictions for GM need to be abandoned.

    Not for Akerson or in this case in particular, but because it will handcuff GM in the future, or at least until the restrictions go away.

    Regardless of how you feel about the bailout, it is done. Undoing it… not going to happen. If you want some money back from it (I didn’t say all), GM’s stock needs to go through the roof.

    To have the improvements GM needs, better people. To get better people, GM needs to be able to pay them what they would get elsewhere. This includes people at the top. CEOs aren’t in this for charity. They are in it for money, and lots of it. The longer the list of executives is limited to people who will work for less, the longer the inept GM sticks around.

    Go ask the CEO of VW if it would work at GM for the original SIGTARP numbers. What do you think he would say?

    • 0 avatar
      stevelovescars

      Except that I don’t seem to recall GM having great, innovative, and responsible leaders before TARP when they had unlimited pay options. Whatever you want to say about TARP, fine, but don’t forget that while GM’s bankruptcy was accelerated due to the financial crisis, they had been heading in that direction for many years.

      I have worked at a number of different types of companies, from GM to Silicon Valley and I have rarely seen any hired manager who was worth hundreds of times what other employees get. It’s one thing to start a company, come up with the idea, and risk everything to create something from nothing. It’s another to come in to an established company with huge pay, benefits, a golden parachute and no-lose contract. Reward is begat by taking a risk and succeeding. Between Wall Street and fat cat CEOs, this basic economic philosophy has been lost.

      • 0 avatar
        BrianL

        Too many flaws in your argument, where to begin…

        I don’t disagree that GM was heading down a horrible path to bankruptcy anyway. I don’t disagree that is wasn’t caused by several levels of management. The point is, if this is going to change, how will it be done? Not through pay restrictions. That just limits the talent pool. Like I said, what would it take to get the CEO of VW to work at GM?

        I also don’t think you understand basic economics given the rest of your post. It is all about supply and demand. Most large companies are going to want CEO’s with proven track records or who are the next wave of talent who people think would be a good CEO. These people are in short supply. There is a large amount of demand. That is why they can paid like this. If the companies don’t want to pay them like this, then they don’t have to. At the same time, does it really matter if someone started the company or took over as the 5th CEO? No, not really. It is the same job, with the same talent pool. If they can get paid more to work elsewhere, they have a great incentive to take another job.

        They also want these huge paychecks and golden parachutes because if they fail, they may not get another chance at being a CEO. Or they may have to go to a much smaller company with much less pay. Kind of like professional athletes who get big contracts and don’t live up to it. They probably won’t have a job doing that much longer, or for near the same pay level.

        Being a CEO is taking a huge risk. Sometimes they get a second or third chance to fail, but many times, they don’t.

    • 0 avatar
      jkross22

      The only way to fix GM is to break it apart. It’s simply too big to be run efficiently because it’s corporate culture rewards mediocrity and stamps out innovation.

      There’s too much dead wood in leadership positions.

      • 0 avatar
        BrianL

        GM (200,000) has far less employees that VW(500,000). VW’s number includes Chinese JV, I don’t know if GM’s number does.

        To change corporate culture, it starts at the top. Why limit the talent pool?

        I don’t disagree with some bad leadership at GM, but I don’t think that you have to break it apart to clear out the dead wood. But, the dead wood does need to be cleared.

        • 0 avatar
          sunridge place

          Outsourcing can be a bitch.

          VW probably has dramatically fewer contract employees or outsourcing than GM.

          Google GM IT Insourcing for a small example. Only 10% of GM IT work is done by a GM employee. That will be changing of course. There are other examples in Advertising/Marketing/Field activites.

  • avatar
    Lampredi

    Why not just pay Akerson to go away? I’m sure it’ll be cheaper in the long run.

    • 0 avatar
      Lorenzo

      I thought he was going to leave when he turned 65. His 65th birthday is in October. Is he leaving then, or at the end of the year? How much longer will we have Dan Akerson to kick around? I’m bored with him already.

  • avatar
    vcficus

    Bertel’s not alone or new on this subject… Magazines have been running the “What’s wrong with GM?” cover since the early 1980s. When Roger B. came in 1980 they had 46% market share; when he left they were at 35% and dropping fast.

    The real criminals aren’t the CEO’s (although I think Rick Wagoner should be in the CEO Protection Program he was so bad) but the potted plant board members who let this garbage go on for 30 years. NO ONE should still be on that board who was on prior to the bankruptcy; boards need to toss management when they’re not hitting their marks instead of approving their bonuses.

    I’m a GMI graduate from 1990 (never worked at The General though) and I’m really happy they changed their name to Kettering University… at least Boss Kettering was a real engineer, not one of the worst management studies of all time like GM since 1970.


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