Chrysler Pays Out $30m in Exec Bonuses

by Robert Farago

Published: November 14th, 2008

Editor’s note: Comments on this story have been temporarily disabled. No, not our story. The Detroit Free Press article revealing that “Chrysler is in the awkward position of paying about $30 million in retention bonuses to keep top executives while the company cuts thousands of jobs.” Yeah, don’t you hate it when that happens? The Freep immediately counters with the ameliorating fact (not) that “Chrysler owes the bonuses under its contracts with about 50 executives, based on a retention incentive plan crafted early last year by former German parent DaimlerChrysler, when it was preparing to sell the Chrysler unit.” Ohhhh, so that’s alright then. Well, not with Freep readers, who’ve jammed the e-switchboard. Either that or the Freep can’t delete the flamers fast enough. Or they simply don’t want to allow their readers to express their outrage, for reasons that we can only guess (cough advertising cough). Anyway, damage control! “Nancy Rae, Chrysler executive vice president for human resources and communications, said the move made sense at the time to ensure potential buyers that key Chrysler executives would remain in place after a sale. She acknowledged that the bonuses could be seen as controversial now.” Yeah, no shit. Anyway, let’s name some names, shall we?

“Documents obtained by the Free Press [you go girl!] show that at least six Chrysler executives are due to receive bonuses of more than $1 million apiece to stay through August 2009, the two-year anniversary mark of when private equity firm Cerberus Capital Management bought an 80.1% stake in Chrysler.

Those promised the largest retention bonuses:

• Frank Ewasyshyn, executive vice president, manufacturing, $1.89 million.

• Frank Klegon, executive vice president, product development, $1.8 million.

• Nancy Rae [yes, the same Rae that’s defending the payouts], $1.66 million.

• Simon Boag, president, Mopar/global service and parts, $1.65 million.

• Steven Landry, executive vice president, North American sales, $1.63 million.

• Michael Manley, executive vice president, international sales, marketing and business development, $1.53 million.

The bonus sizes ranged from a high of Ewasyshyn’s $1.89 million down to $200,000. The agreements provided for payments of 25% of the bonuses in February 2008 — which were made on schedule — and for the remaining 75% to be paid in August 2009.” [thanks to AUTOEMPLOYEEFORNOW for the link]

Robert Farago

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2 of 23 comments

Yankinwaoz on Nov 15, 2008

Too bad Chrysler isn't public any more. It would make more sense to pay these bonuses in stock options.

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FromBrazil on Nov 15, 2008

I'm with Dr Lemming. WTF should US execs get paid so much more is beyond me. And if payment is supposed to be tied to performance... **SIGH** Strange world. That's what we get into when we start lionizing types like Jack Welch and such. Just a thought PS If the US gov does take over Chrysler an honors these payments, if I were a US citizen, I'd be mighty pissed!

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