The Detroit automaker, which received a $49.5 billion bailout in 2008 and 2009, must get approval for the pay packages for its top 25 executives from the Treasury Department, as a condition of its government bailout.
According to a copy of the proposal obtained by The Detroit News from a source familiar with the documents, GM is proposing raises for 18 of its top 25 executives for 2013, with each of those making at least $1.8 million.
CEO Dan Akerson didn't get a raise last year, but received a $9 million pay package, including a $1.7 million cash salary. He makes far less than the CEOs of Ford Motor Co., Chrysler Group LLC and Volkswagen AG, all of whom earned more than $20 million last year. In a 2011 interview, Akerson confirmed he gave up "more than" $100 million in 2010 to run GM when he left Carlyle Group.
GM spokesman Tom Henderson said the automaker won't "comment on the documents we've turned over to the committee."
The Detroit automaker disclosed its proposal to the House Oversight and Government Reform Committee, which is holding a hearing on executive pay on Tuesday on companies that got large bailouts, as did Detroit-based Ally Financial Inc., which is 74 percent owned by Treasury as part of a $17.2 billion bailout.
A committee spokeswoman declined to comment ahead of the hearing.
According to documents obtained by The News, Auto lender Ally is proposing to pay $9.56 million to its CEO, Michael Carpenter, who was paid $9.5 million in 2012
Ally is also proposing to pay Thomas Marano, the CEO of ResCap, its troubled mortgage unit that is in bankruptcy protection, $8 million.
In 2012, the CEOs of three companies that received large government bailouts — GM, Ally and AIG, didn't receive raises.
GM is proposing to pay about $82 million to its highest 25 employees in total compensation — over the $65 million it paid them in 2012 — and $78 million for Ally. All 25 of the top-paid Ally executives get more than $2 million.
The pay restrictions were imposed by Congress in the midst of an outcry in 2009 over high pay and some firms that received large government bailouts. GM must live with the restrictions until Treasury completes its exit of its remaining 19 percent stake, which the government says will happen by March 2014.
Taxpayers stand to lose about $12 billion on the $49.5 billion GM bailout at current trading prices.
Christy Romero, the special inspector general overseeing the $700 billion Troubled Asset Relief Program, will testify before the House panel, as will the Treasury's acting pay czar, Patricia Geoghegan, according to a memo released Friday.
The House Oversight and Government Reform Committee's panel on economic growth, job creation and regulatory affairs is examining the pay of executives from firms that received large government bailouts in 2008 and 2009.
Last month, Romero criticized the Treasury for approving "excessive" pay raises at GM, Ally Financial Inc. and American International Group Inc.
Executives from the firms will not testify on Tuesday, but have defended the pay packages as appropriate.
The report was critical of Geoghegan, the Treasury's special master overseeing executive pay at companies that got very large bailouts.
In the coming months, Geoghegan will have to approve pay packages for the top 25 executives at GM and Ally for 2013. The committee will seek "her reaction to the report as well as her efforts to ensure that these problems are corrected as (her office) prepares pay package determinations for executives in these companies moving forward," the committee memo said.
Cash salaries of $450,000 or more were approved for 94 percent of the top 25 employees each at AIG, GM and Ally.
"While taxpayers struggle to overcome the recent financial crisis and look to the U.S. government to put a lid on compensation for executives of firms whose missteps nearly crippled the U.S. financial system, the U.S. Department of the Treasury continues to allow excessive executive pay," the report said.
The executives at GM, Ally and AIG "continue to rake in Treasury-approved multimillion-dollar pay packages that often exceed guidelines" previously announced, the report said.
AIG repaid its government bailout in December and is no longer subject to the pay restrictions. Initially seven companies — including Chrysler Group LLC, Chrysler Financial, Citigroup Inc. and Bank of America — were covered by the restrictions.
Geoghegan agreed to shift more pay away from longer-term incentive pay.
She removed long-term restricted stock for senior executives, including the CEOs of AIG, GM and Ally.
In total, she removed long-term restricted stock from 24 of the 34 employees' pay packages and, for all but one of the 24 employees, replaced it with stock salary, as requested by the companies.
In total, she approved pay packages worth $5 million or more for 23 percent of the top 25 employees at AIG, GM, and Ally — nine at AIG, three at GM and four at Ally.
In 2012, the Treasury approved all 18 pay raises, totaling $6.2 million, which were requested by the companies. Nine of those raises went to GM executives.
Geoghegan said in the letter that she has "limited excessive compensation while at the same time keeping compensation at levels that enable" the companies "to remain competitive."
Treasury noted that average cash pay was cut by more than 90 percent over the pay received before the bailouts.
It agreed to shift compensation to stock salary, which is earned immediately, from restricted stock that vests over time when an "executive is very senior and may retire in the next few years."
Treasury approved raises at GM of 15 percent to 23 percent without any further detail or analysis for four employees "on the basis that they were among the individuals that GM's CEO most relied on, and they had received significant promotions or increased job responsibilities," the audit said.
The audit said that for one GM employee who received a cash salary of $600,000 in 2011, Treasury approved an additional $50,000 in cash in 2012.
Original Article
Source: detroitnews.com
Author: David Shepardson
No comments:
Post a Comment