New GM CEO's Pay Package Worth $9 Million
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New General Motors Co. CEO Daniel Akerson will get up to $9 million in salary and stock, the same pay package granted to his predecessor, Ed Whitacre.
Akerson, a former telecommunications industry and private equity executive, will receive $1.7 million in annual salary, $5.3 million in short-term stock payable over the next three years, and another $2 million in stock that’s part of the company’s long-term executive compensation plan.
The automaker, which is 60.8 percent owned by the U.S. government, disclosed the pay package in a filing on Friday with the Securities and Exchange Commission. It is identical to what the company disclosed for Whitacre in February.
Akerson also is on GM’s board of directors, but will receive no compensation for his duties there, the filing said.
Akerson, GM’s fourth CEO in less than two years, took over leadership of the company on Sept. 1.
Whitacre, CEO since December, said he stepped down because the company needed a chief executive who would be in charge long after it sells stock to the public. The sale, called an initial public offering, is expected in mid-November.
Whitacre, 68, a retired CEO of telecommunications giant AT&T Inc., said he didn’t want to stay too long after the stock sale.
Whitacre received roughly $1.1 million of his $1.7 million annual salary for his eight months as CEO, plus he will get the full $5.3 million in short-term stock compensation payable over three years starting in 2012, said GM spokeswoman Noreen Pratscher. He is not eligible for the $2 million in long-term stock compensation since he no longer is a company employee, she said.
GM also disclosed that Whitacre will get $300,000 to remain on as chairman until the end of the year when Akerson takes over that role as well.
Like Whitacre, Akerson has worked as a top executive at major telecommunications companies, holding leadership posts at both MCI and Nextel. A graduate of the U.S. Naval Academy, Akerson was appointed to GM’s board by the government in July of last year after GM emerged from bankruptcy protection. He also led global buyouts for The Carlyle Group, a private equity firm.
GM’s SEC filing said that Akerson agreed to the pay package after the government’s pay czar approved it Wednesday. Pay czar Kenneth Feinberg stepped down on Friday and was replaced by Treasury Department lawyer Patricia Geoghegan. The pay czar is responsible for setting pay guidelines for top executives at the four companies still getting exceptional assistance from the government’s $700 billion bailout fund.
In addition to GM, those companies are American International Group, Chrysler Group LLC and Ally Financial Inc., the financing arm for GM and Chrysler.
A Treasury Department spokesman said Akerson’s pay package is in line with Whitacre’s and consistent with the rules governing the federal bailout fund.
The U.S. government got its stake in GM after giving the Detroit auto giant a $50 billion bailout to live through bankruptcy protection last year. GM has repaid $6.7 billion, and the government hopes to get the rest of its money back through the common-stock sale.
GM itself also plans to sell preferred shares to raise capital and pay off debt.
(Copyright 2010 by The Associated Press. All Rights Reserved.)