Money Matters, Simplified.
New GM’s latest CEO to get $9mn pay package
by Jamie Anderson - September 11, 2010 - comments
New General Motors Co. CEO Daniel Akerson, a former telecommunications industry and private equity executive, will get up to $9 million in salary and stock, the same pay package granted to his predecessor, Ed Whitacre.
In a regulatory filing made Friday to the Securities and Exchange Commission (SEC), General Motors Co. stated that its new chief executive, Dan Akerson, will be paid $1.7 million in base salary for the 1st year.
In addition to the base salary, Akerson, is also entitled to receive $5.3 million in stock. He will be entitled to this stock beginning 2011 and would be delivered to him over a 3 year period.
Long term player
Edward E. Whitacre Jr, Akerson's predecessor, was given a similar package as the one that has been offered to the new incumbent.
However, Akerson’s recompense is 40 percent less than the compensation paid to Rick Wagoner, who led G.M. from 2001 till early 2009. Wagoner earned $14.9 million in salary and stock in 2008.
GM intends to have leader who is willing to steer the company for a long term. To further that purpose, it will also give Whitacre $2 million a year in restricted stock under a long-term incentive plan.
As per norms applicable to companies that have been bailed out by the federal government, the U.S. Treasury pay czar Kenneth Feinberg has also approved Akerson’s package.
Terms of contract
Although his employment contract does not specify length of employment, Akerson has expressed his willingness to remain with GM for “two to five years, and possibly longer.”
The terms of the agreement however state that if Akerson was to leave before 2014, he would have to forgo his stock options.
GM intends to have leader who is willing to steer the company for a long term. To further that purpose, it will also give Whitacre $2 million a year in restricted stock under a long-term incentive plan.
Whitacre, 68, was asked by the board to step down as he was reluctant to commit staying at GM much past the proposed initial public offering (IPO).
Akerson, who took over the reigns Sept. 1, is GM's fourth CEO in less than 18 months.
The immediate challenge before him is to usher the once Detroit behemoth through the IPO and then also administer its turnaround.
IPO before November end
Sources having knowledge of the matter state that the auto manufacturer intends to hold the IPO before the end of November this year.
GM will, immediately after the Nov. 2 midterm elections, also launch a "road show," wherein it will pitch the IPO to investors.
The IPO will enable the U.S. government to divest its 61 percent stake in GM, which it acquired last year when it bailed out the ailing company.