GM CEO Henderson: Getting a raise despite the pay czar's cuts
Filed under: Company News, Economy, People, American International Group, INC., Bank of America, Citigroup, General Motors
Americans can be excused for thinking that executives at the seven companies receiving TARP bailout funds would see a pay cut this year, following yesterday's news that the U.S. Treasury's pay czar would slash executive compensation by as much as 90 percent starting next month.But at least one chief executive among the troubled automotive and banking companies is getting a raise -- Fritz Henderson, who replaced Rick Wagoner as General Motors CEO in March. Henderson (pictured) will see his total annual compensation rise to nearly $5.5 million under guidelines imposed on top executives at companies that received funds under the federal government's bailout plans, Bloomberg News reported, citing a person familiar with the matter.
Henderson's cash salary, which currently rings in at $1.26 million, has been trimmed 25 percent to $950,000, said the person, who Bloomberg said declined to be identified due to the private nature of the matter. But Henderson will receive $4.24 million in stock and restricted stock, according to a letter from Kenneth Feinberg, the special master for executive compensation for the Troubled Asset Relief Program.
"Most people wouldn't consider it a raise. They brought the salary down some and increased the reliance on long-term stock," GM spokeswoman Julie Gibson told the news agency.
Feinberg said Thursday in a press conference unveiling the new pay rules that his primary responsibility was to ensure that taxpayers got as much of their money back as possible. "Taxpayers are in deep with these seven firms," Feinberg told reporters.
In addition to GM, companies receiving TARP funds include GM's financial unit, GMAC; Chrysler, and its finance arm Chrysler Financial; Bank of America (BAC); Citigroup Inc. (C); and American International Group Inc. (AIG).
Under the pay plan, cash salaries will be limited to $500,000 for more than 90 percent of affected employees. Personal expenses for such perks as company autos and corporate jets will be capped at $25,000 unless Feinberg's office approves higher payments.
The new rules call for top executives to be provided a base salary combined with "stock salary." Employees are required to hold the stock for two years and can sell only one-third of their holdings each year for three years.
A third category, known as "long-term restricted stock," is tied to the company's repayment of bailout money. The goal here, Feinberg said, was to promote strategies for long-term growth rather than short-term gains. That's meant to counter critics who argue that exorbitant cash salaries granted to executives foster shortsightedness.
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Reader Comments (Page 1 of 16)
10-23-2009 @ 3:44PM
chicobombico said...
Henderson and Wagoner both deserve the largest raise possible. After all they put more people out of work than I can count, they ran second screwing up the economy the banks came in number one. Sure give these bastards more money it is the american way screw up, move up.
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10-23-2009 @ 3:52PM
Shawn said...
Back to the old ways...
10-24-2009 @ 4:35AM
Joe said...
AMEN!!!!
10-24-2009 @ 2:23PM
mickey said...
All of us citizens are suffering and these guys are talking about millions of dollars salaries after we gave them 56 billion in bailout money that we will never see again. Makes me want to throw up.
10-24-2009 @ 5:36PM
john said...
this is not big bussiness, this is big goverment at work, at work to take over all bussinesses if you stop and think goverment take await and giveth, post office, banks,military. health insuranceand today ,i read that sen,russell flack (r-ga) that we as a goverment spend to much on police ,states would save enormous amounts of money if we had a public police system, sen. belle wether (d-MO) statement to express her support said that she is for if we cant aforded to pay rising costs for police the the fiscally responsible thing to do is to cut social security for the middle class, yes thank you belle wether I FOR ONE TRY TO LIVE ON MY SS ,not that are senator will cause of your retirement payment of 15 thousand a month is in place for senator and congress men ,are you not working for the people and i dont remember voting for a retirement package for you and your party,thats right you and your party DEM,REP)vote on it, people we have to take our country back please vote all these old people out of office and young people that are for more goverment,please stop an think,what is the goverment doing ,one thing for sure ,they what to control e v e r y t h i n g big bussiness are small. please think goverment controll is that what you want, ONE NATION UNDER GOVERMENT
10-24-2009 @ 5:53PM
Jeff said...
Congress fails miserably at everything they do and you can bet they'll get a raise
10-23-2009 @ 4:05PM
jj48isgreat said...
Yes, this is change that we can believe in! Lay off the factory worker, eliminate great car brands and while you're at it...give yourself an incredible reward for basically doing nothing!
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10-29-2009 @ 11:17PM
Sarge said...
Are these people nuts, crazy, don't care, or a combination of the three?! This, in absolutely no way, endears the (potentially) car-buying public. I, for one, will never/ever/never go anywhere near a G.M. outlet. The product was, is, and always will be nothing short of junk...the same might be said of senior "leadership" (a term employed with much charity).
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10-23-2009 @ 11:33PM
zzcog said...
Funny you should say this because I read a report today that says the US automakers are now AHEAD of the rest of the world when it comes to cutting edge automobiles and reliability! Guess you will believe what you want to.
10-24-2009 @ 5:32AM
allby65 said...
I own a cadilac ,a GM top of the line. My girlfriend owns a late model honda pilot.I bought my car used at a chevy dealership, and I v'e had work done on it at chevy and cadiliac.My girl has own honda's in the past , and she loves the older models,because the newer models are high maintenence. All cars built in the last 25 years are a piece of sh***t. I v'e seen brand new cars at both dealerships on the service racks, muiltiple times. I v'e had the same parts fail under warranty time and time again. Infact clothing,cars, houses,and production of the very things we depend to live and survive on stinks and are carelessly and quickly fabricated. It's true technology has got greater in life,but the longevity of most consumer products are poor and very costly.
10-24-2009 @ 8:40AM
Kev in said...
That is not true GM makes very good cars. I just gave away a 93 Buick LeSabre that had 210,000 miles on it and it still ran get, I would drive it anywhere. I know alot of people that are getting alot of miles out of there GM cars. If I not mistaken 3800 engine was said to be one of the top 10 engines made. Do your research before you talk. They have over all the best riding cars on the road.
10-25-2009 @ 8:21PM
max said...
you right on all your comments. we can not even begin to correct our present problems without TERM LIMITS on congress and this will be a very difficult to do.
10-23-2009 @ 4:14PM
Jim said...
I wonder if Henderson even has the brains to fear for his life, in light of his greed. His cash salary should be at $200,00.00, that is enough to live on, with any stock held for at least 5 years. Stop rewarding this moron.
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10-23-2009 @ 4:23PM
dennis said...
the UAW worker has lost thousands of dollars in concessions to help keep the company going ........but the ceos get raises..........got to love the thinking!!!!
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10-23-2009 @ 6:50PM
Ha said...
The UAW is full of a bunch of union thugs who basically ruined the capability of the American car companies to compete with their foreign counterparts.
10-23-2009 @ 11:32PM
zzcog said...
That's a real laugh when it was the UAW that brought GM down!
10-25-2009 @ 6:47PM
JDD said...
You are soo right that we gave up alot.... My husband worked for GM for 43 years and, had to retire because he became disabled.... He passed away almost one year ago... God rest his soul............. We bought NOTHING but Cadillacs, because that was where are bread and butter came from......
Why did GM need a bailout just to go bankrupt?????????? Didn't they say if you take this money...... You can't give out anymore BIG BONUSES to anyone??????
Hear I am trying to struggle on paying TWO mortgages with the added expense GM put on me...($50.00 co pay for one prescription) and here they are giving ONE person MILLIONS for one year of service.......... My husband is turning in his grave as we speak!!!!!!!!!!!!!!
10-23-2009 @ 4:32PM
Joe said...
So this is the new GM ?
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10-23-2009 @ 4:31PM
ront said...
the headline of the article is not quite the same as the content. he is not getting a raise. as stated in the article, his base wage os being cut 25%. he is getting increased stock options. he is not allowed to seel the options for 2 years. that's a step in the right direction. fnally some longer trem outlooks are being considered, instead of quarterly profits. if the stock goes up, that benefits everyone, including us taxpayers who own 60% of gm.
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10-23-2009 @ 5:03PM
Bothepro24 said...
I agree with what you say. However, regarding our 60% ownership, did you get a chance to vote for the board, I guess our Federal government forget to mail my proxy. And by the way, we are led to believe that only experiened CEO's can get us through this. Sorry, but anyone who can read and comprehend a spread sheet can look and see immediately what needs to be done.