By on February 20, 2010

Gosh, was it really just Monday that Bob Lutz was complaining about the pay problems round General Motors way? Automotive News [sub] reports that, in addition to hiring ousted CEO Fritz Henderson as a consultant, GM’s Chairman, CEO and VP for Rattlesnake Killin’ Ed Whitacre has been handed a compensation package including $1.7m in cash annually. Not to mention the $5.3 million in stock payable over three years starting in 2012, or the $2m in restricted stock. Sure, that’s not much compared to most Chariman/CEO types, but it’s not bad for a government teat-sucking, profitless wonder. Especially considering former CEO Fritz Henderson only made $950k in cash annually plus $4.2m in stock as CEO (he now makes $700k annualized as a 20 hour per month consultant). Ken Feinberg is slacking!

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10 Comments on “Does GM Still Have An Executive Compensation Problem?...”


  • avatar
    zerofoo

    Would someone finally put a fork in this company? They’re done.

    -ted

  • avatar
    crash sled

    So Government Motors wants these guys to bounce the short term value of the stock, and is incentivizing accordingly?

    …the more things change…

  • avatar
    panzerfaust

    A certain song by “The Who” comes to mind.

    The new boss….

  • avatar
    gslippy

    As I’ve mentioned before, I really don’t go for the class envy stuff. The issue isn’t how much they are paid, it’s whether these individuals should occupy these positions in the company.

    Perhaps there are others in the blogosphere more qualified to run GM, but *sometimes* the people who know the company best can do it best. A similar problem arises when bad government officials are thrown out of a defeated country (Baathists in Iraq, Nazis in Germany); too much housecleaning and you end up with total chaos in leadership and nothing gets done. Much of a leader’s effectiveness is a function of their network, not to mention the required people skills, technical skills, and inspirational vision.

    What qualified candidates will run GM for cheap? The answer is nobody, but we don’t mind the pay when the leadership is good. So therefore, a leadership change is the best solution, NOT pay cuts.

    Oh, yeah, and this question is totally a result of GM being “Government” Motors, which should never have happened in the first place.

  • avatar
    Robert.Walter

    Perhaps Bob Lutz’s recent lamentations regarding undercompensation were to pave the way for this announcement (and more to come?).

  • avatar
    Facebook User

    Oh man, this is so damn beautiful. After a brief flash of glory (highlighted by January’s highly suspect reported sales figures) it looks like the good Gov’t — er, General — is back to its all-too familiar ways of falling on its collective face with increasing frequency.

    First they couldn’t attract a qualified CEO, despite a market overflowing with available (and desperate) candidates… forcing Gov’t Motors to settle on Whitacre, the man only Obama wanted. NOW, GM must dig even deeper into the septic tank and re-hire Henderson (the reasons why don’t matter, just that the face of GM’s most recent failures is once again drawing a GM paycheck… consulting!!! Oh, the irony!)

    Gov’t Motors: Dead By 2011. Can’t come a moment too soon either… if only we hadn’t been forced to give up billions in tax dollars first in a failed attempt to prop it up.

  • avatar
    jkross22

    I don’t understand those calling out implosion dates for GM. That’s not going to happen. The Michigan gang won’t allow that to happen, and neither will the labor/UAW funded and backed Democratic party.

    GM is acting like the stereotypical welfare queen with 10 kids, a drug addiction and a claimed inability to work. This story sends a clear message to the entitlement minded UAW members. Why shouldn’t they simply refuse to give any more ground on wage and benefit negotiation?

    • 0 avatar
      Facebook User

      To the contrary, it wouldn’t take much at all for the ceiling to fall in on Government Motors, just a specific sequence of well-timed events. Some of those have already begun:

      -Increasing public sentiment against unions, bailouts, and bureaucratic largesse… that makes any further action to “save” GM extremely unpopular politically, and even the Dems know it.
      -Clearly incompetent management
      -Ever-declining retail sales (fleet sales don’t mean jack, there’s no money in them)
      -Just one or two competitive models, thoroughly overshadowed by mediocrity throughout the model range as a whole
      -New models appear less-than promising, and not what buyers want (Cadillac XTS, a $40K Volt)
      -Many buyers who may actually consider a Gov’t Motors car are priced out from what few desirable products GM offers (really, is there a market for a $50K Buick anything?)… and the only way the company can lower stickers is to throw cash on the hood, killing overall value
      -That whole darned “GOVERNMENT MOTORS STOLE MY MONEY!” stigma

      I think all that is quite enough to kill GM.

    • 0 avatar
      Steven02

      Facebook User,
      While I don’t think that GM is going to be going anywhere soon, I don’t think the gov’t will put any more money into the company either.

      Your 1st point, is already here. The 2nd point with incompetent management was very prevalent in the past. Lets see how the future goes there. The 3rd point… I don’t think retails sales are actually declining right now, at least not for the brands that are sticking around. Those brands are seeing increases. The 4th point, I don’t agree with. They do have several models that need to be replaced, and there recent are plans for most, if not all of them. I know the Impala replacement is going to take a while. Also, some of the future models seem to be exactly what people want. Many people want the new vehicles that are coming out like the Regal and Cruze. Calling the XTS not what people want when it has only been shown as a first concept is ridiculous. I also think it is terrible to think that people won’t want that car. Not everyone wants a RWD corner carver. Many people do want large FWD luxury vehicles. As for the Volt, I beg GM sells everyone they make for a good while and does it easily. But, the 2 cars you bring up are not cars that are going to make or break GM either way. I really don’t understand how people are priced out of GM cars. If someone can’t be a Chevy Malibu, Equinox, or Cruze when it comes out, who are they going to buy from? And the optioned to the max Buick Enclave actually sells quite well.

      To get all of these points is going to take awhile if it ever happens.

  • avatar
    Mikein08

    The problem of course is not how much these people are paid; the
    problem is that they are INCOMPETENT. They are a perfect example of the Peter Principle. Here’s the recipe guys, it’s really simple:
    make affordable and reliable cars and trucks that people actually
    want to buy! Is that so hard? Apparently it is.

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