Lutz: GM Execs "Way, Way, Way" Underpaid
Everyone in every business everywhere thinks they are at least somewhat underpaid, and for most, there’s a certain amount of truth to the sentiment. But then, most Americans don’t have jobs that allow them to destroy billions of dollars in value over the course of their careers. Nor does the Detroit News give most of us a forum to whine about our perceived underpayment. Having helped lead GM into bankruptcy and bailout (with thousands of Americans losing their jobs along the way), Bob Lutz still isn’t happy about executive pay limits at GM, and he clearly has no compunction about airing his grievances to the DetN.
What you see is what you get, and it ain’t a lot. All I know is, right now, we are given our responsibility, and given the rigors of the job and demands and the accountability, I would say we are being paid way, way, way below market. Right now, that isn’t a problem, but over time, clearly a company that undercompensates senior executives is going to have a retention or recruiting problem
Because when GM could afford to shell out tens of millions per year for the best leadership money could buy, they just killed it. Take Lutz’s buddy, former GM CEO Rick Wagoner for example: the guy oversaw a decade of decline and had to be forcibly removed by the Presidential task force… how hard should it have been to retain leadership like that? Based on the blue-chip firms lined up none-deep for his post-GM services, the answer is probably not the $15m or so The General was paying him.Besides, as noted auto analyst Maryann Keller puts it,If you are in a situation where your very existence is determined by the largesse of the government, I’m not sure you have a whole lot to say about what your compensation should or shouldn’t beUntil GM pays back the government loans and the Treasury divests its 60 percent stake in the automaker, complaining about executive pay is deeply hypocritical and frankly, pathetic. Taxpayers were told in no uncertain terms that the country needed to sacrifice to save General Motors, and by extension, the whole economy. Competitive compensation didn’t prevent Lutz and Company from reducing GM to begging from taxpayers, and there’s no reason to believe that limited pay from the taxpayer-rescued new GM could inspire even worse performance. If Lutz is unhappy enough with pay limits to attach three superlatives to his description of them, it would be interesting to see how he and the remaining GM insiders do in the job market. Because, for the most part, their performance has been way, way, way below market.
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