By on February 26, 2010

It’s been over ten days since GM’s Bob Lutz took to the local papers to complain that GM’s executives are “way, way, way underpaid,” and its still been less than a week since Ed Whitacre’s $9m compensation package was announced but politicians are only now starting to sit up and take notice. Barney Frank (D-MA) can usually be counted on to give greedy CEOs a good dressing-down, but at this point, Mama Frank seems to have given up on the government-owned automaker’s execs. The Detroit News reports Frank’s mild disappointment thusly:

“I don’t think Mr. Whitacre was going to go do something else” if he got paid less, Frank told reporters this afternoon after a hearing. “He’s having a good time there. I think they way overcompensate themselves.”

Meanwhile, where’s the “I’ll-do-it-for-a-buck-a-year” Iaccoca spirit gone? If Whitacre was really playing hardball with Feinberg, and would have left after taking control as Chairman and CEO if he “only” made the same $950k in cash that Fritz Henderson made, what does that say?
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14 Comments on “Barney Frank: Ed Whitacre Is Overpaid, But What Are You Gonna Do?...”

  • avatar

    Whitacre’s position is much like that of Wagoner’s, and indeed most CEOs whose companies are struggling: the less that is said about his compensation (esp. in relation to his company’s performance), the better.

    Just like the less is said about the Equinox’s highway fuel economy, the better…though Chevy itself seems determined to continue talking about it in their marketing.

  • avatar

    I know I’ve seen flak about Iaccoca’s “Dollar a Year” being largely symbolic (I honestly don’t remember where or how, and it may have been just a bunch of haters) but I think we could use the symbolism now.

    • 0 avatar

      Iacocca cleaned up at Chrysler despite earning a dollar a year, because he payed himself heavily in stock, especially when he first took over. As he turned the company around and the stock price rose, he walked away with a lot of money.

      However, there is nothing wrong with that, as it meant that his compensation was based around the company’s success. If the company recovered and did well, Iacocca would have walked away with a boatload of money. If he screwed up and the company failed, he would have walked away with absolutely nothing.

  • avatar

    I wonder what Barney “Fanny May” Frank would be doing for money if they paid HIM less?

    Corrupt SOB.

  • avatar

    The dollar a year thing was a pretty effective gimmick, but it was a gimmick. I’ve got no problem with using our tax dollars in a pay for performance scenario for GM executives, but just like Whitacre’s predecessors, there are no publicly announced business goals for GM that I’ve heard.

    Executives don’t want that level of accountability, but you would have hoped that a government owned organization would be required to reveal that type of accountability. As Barney Frank says, oh well. Only he’s in a position to do something about it. But isn’t. Shocka.

    Iaccoca style leadership is hardly present anywhere in corporate America. Southwest Airlines is the only big company that comes to mind with that style.

  • avatar

    What the lamestream media forget to mention is that when Lee “cut his pay” to $1 per year, he negotiated an extraordinary amount of options and warrants in return for the pay cut.

    Two ways to view this: 1) he took a big risk and was rewarded extremely well for taking that risk. 2) Given the backing of the USA to finance the restructuring at the time, he was playing with house money.

    He seems to be a pretty smart guy. Draw your own conclusions.

  • avatar

    Barney Frank has fed himself at the government trough for years, so I guess he’d know if others are being overpaid, he’s had first hand experience.

  • avatar

    Funny how corrupt Barney Frank is and congress in general. I doubt any, maybe with a few exceptions, can say that Whitarce is getting payed too much when you look at the job that they are doing themselves.

  • avatar
    Gardiner Westbound

    GM is proof pay for performance does not work. Regardless, if Whitacre and Lutz are unhappy with their compensation and have better offers they should accept them.

  • avatar

    Pure politics on Frank’s part, Whitacre and the auto industry are easy targets. Would you expect anything less from a politician?

  • avatar

    Which would be a good thing, as long as taxpayer equity isn’t wiped out to the tune of $30b+, as has been estimated by the government.

    There’s a way to skin this cat. Give Whitacre $1 million/year in cash. Then, structure his pay so that he makes a pile only after the taxpayers have been made whole.

    If he doesn’t like it, he can quit.

  • avatar

    At the risk of being an old fart, let’s get our nomenclature straight, please?

    Chrysler’s “bailout” in the Iaccoca days was NOT a government bailout like we are seeing today.

    What happened was Chrysler was loaned money by the PRIVATE sector, who, unlike the last few years, had some reservations about loaning money, and actually wanted to have some hope of getting paid back.

    The gov GUARANTEED the loans. Taxpayers were only on the hook IF Chryco didn’t pay the private lenders back. NO taxpayer funds ever went out the door.

    I realize this is a minor point to some, but it really isn’t. Back in the day, no financier would have let GM or Ford get TENS of BILLIONS dollars in the hole, with no way evident on the balance sheet to pay it back.

    To equate (if only in name) the Fed being Chryco’s cosigner for a bank loan with the wholesale rape of the American taxpayer that just happened is just this side of revisionist history.

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