Rick Wagoner may be leaving his position as CEO of General Motors but he’s not going away empty handed. Though he cannot receive a severance package under the terms of the auto industry bailout, he is due to receive some $20 million in retirement benefits after 32 years with with the company.

And this is on top of the $63 million in compensation he received between 1992 and today. The only caveat? Bankruptcy.

From ABC News:

If GM is forced into bankruptcy, Wagoner could get much less, according to Dave Schmidt, an executive compensation analyst with James F. Reda and Associates. Less than $1 million of Wagoner’s total $20.2 million pension package appears to be guaranteed if GM goes bankrupt, Schmidt said.

I imagine he’ll manage to scrape by.

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Ed Brayton is a reporter for TWI’s sister site, The Michigan Messenger. ]]> http://washingtonindependent.com/36481/wagoner-dont-cry-for-me-general-motors/feed 0 http://washingtonindependent.com/36312/an-apocalypse-for-the-rest-of-us http://washingtonindependent.com/36312/an-apocalypse-for-the-rest-of-us#comments Mon, 30 Mar 2009 16:56:46 +0000 Aaron Wiener http://washingtonindependent.com/?p=36312 From the treasure trove of conservative apocalyptic predictions that actually sound pretty good comes this piece today in the neocon magazine, Commentary. The article describes the ideologically driven conditions being placed on General Motors as a result of the government bailout, arguing that “GM will be used to More...

So says Rep. Brad Sherman (D-Calif.), a liberal member of the House Financial Services Committee, which hosted the three auto execs this morning to examine their requests for $34 billion in emergency loans.

There’s been much made of the $1 annual salaries that the CEOs say they’ll accept as a term for receiving that bailout. But let’s not confuse “salary” with “compensation.” Relative to bonuses and stock options, the salaries of corporate executives often constitute the smallest chunk of the pay package.

Indeed, last month Sherman asked each CEO if they’d be willing to limit total executive compensation to $1 million a year in exchange for the bailout cash.

All say they’ll forgo 2009 bonuses, but refused the $1 million cap. And there’s good reason why.

Ford CEO Alan Mulally, for example, received $22.8 million in 2007, according to Equilar, an executive pay database, via The L.A. Times. But less than half of that — just $9 million — came in the form of “salary and cash incentives.” The rest came from stock options.

For Rick Wagoner, the head of General Motors who received $15.7 million last year, $11.7 came in the form of “stock-based compensation,” the Times notes.

Chrysler, a privately held company, hasn’t released its executive compensation figures.

The stock of all three companies has been in the tank for some time, of course, but that could change for the benefit of the executives if the Big Three were to get some good news — for example, if they could secure $34 billion in taxpayer-funded loans from Congress.

In addition to the compensation question, Sherman also asked the executives: (1) if they would commit to closing foreign plants before domestic ones, and (2) if they’d be willing to set aside funds to honor warranties in the event their companies fail.

The California congressman wasn’t pleased with the responses. From his statement:

My three questions were designed to secure commitments protecting consumers and American workers from the risks associated with the financial difficulties of the Big Three automakers.  Unfortunately, GM, Ford, and Chrysler were unwilling to make these commitments.

Who said it was just Republicans criticizing the bailout?

Fast forward nearly 30 years, and several lawmakers have put the Iacocca challenge to the CEOs of Detroit’s Big Three, who are in Washington this week pleading with Congress for a $25 billion bailout to buoy the sinking industry.

During a Senate Banking Committee hearing with those executives yesterday, Sen. John Tester (D-Mont.) asked point-blank if the well-compensated executives would be willing to make the same sacrifice that Iacocca did. Only one, Chrysler head Robert Nardelli, answered non-evasively. ” I’d be willing to accept that,” he said.

The other two — Ford CEO Alan Mulally and General Motors executive Rick Wagoner — showed no such alacrity for a $1 paycheck. Wagoner boasted of cutting his salary “unilaterally 50 percent” a few years back, but had little response when Tester pointed out that half of an enormous salary is still enormous, relatively speaking.

Mulally rejected the challenger even more bluntly. “I absolutely respect the intent of your question as a symbolic gesture,” he said, “but it is a symbolic gesture.”

Such remarks may not play well with Congress. Even supporters of the auto bailout are warning that huge pay packages for executives of bailed-out companies leave a bad taste with an American public that’s also struggling in the economic downturn.

“I can’t begin to tell you,” Sen. Chris Dodd (D-Conn.) told the CEOs yesterday, “what sort of reaction there’d be from the public if you on your own would be willing to take some steps that would reassure the American public that their dollars, if they’re going to be forthcoming, are not going to be used in any way to provide exorbitant salaries and fees to people.”

Judging from the behavior of banks after they got their $700 billion bailout, lawmakers might do better simply to write such restrictions into the legislation.

The Massachusetts Democrat framed the debate as a something akin to class warfare. Why, Frank wondered, would the White House rush to help Wall Street with $700 billion but so adamantly resist diverting a fraction of that amount to the country’s largest manufacturers?

Well, AIG, which I don’t think anyone would think was as important to the American economy as the auto industry … got $40 billion just now to make it up over $100 billion. To some extent, let’s not have a white-collar/blue-collar bias in our public policy…I don’t want to set a precedent that bankruptcy now is a way in which you undo what gains unions have been able to hold on to.

Frank went on to describe the conditions of his version of the Detroit bailout bill (which differs from the Senate plan), including restrictions on executive pay and a dividend moratorium for the Big Three. The companies would also have to present the government with a new business model for creating more fuel-efficient vehicles. More money, Frank said, could follow.

If, on Mar. 31, the president does not believe that this is going to get them the viability with energy efficiency cars, they have to repay the loan; they get no more money. If they can show by Mar. 31 a plausible way to go forward, then we would consider giving more money, again, under equally stringent conditions.

We heard inklings of this message yesterday in the Senate Banking Committee, where Chairman Chris Dodd (D-Conn.), another supporter of an automaker bailout, told the Big Three executives that he’s under no illusions about the eventual size of the bailout they’ll need. “I suspect,” Dodd said, “that this $25 billion is not going to be the end of it.” (These three executives are testifying before Frank’s House panel as we speak.)

The issue has been at the forefront of GOP opposition to the plan. Republicans, already wary of the degree to which Washington has intervened in the private marketplace this year, think the Detroit bailout plan represents nothing more than throwing good money after bad. They think the Big Three are destined to fail due to poor management decisions, and wonder why lawmakers would waste taxpayer money to delay the inevitable.

During yesterday’s Senate hearing, one testy exchange between GOP Sen. Bob Corker (Tenn.) and General Motors CEO Rick Wagoner summarized the Republicans’ mood:

Corker: “Would you all make the pledge that if you get the $25 billion, you’ll never be back to see us again?”

Wagoner: “Sir, if you could make the pledge to us that the U.S. economy will turn around on a certain point in time, then — and the financial markets will rejuvenate, then we would be glad, based on that data, to come back to you and give you … our exact best estimate of how much financing we think we need, sir. We’d be very glad to do that.”

Corker: “You’re going to be back, aren’t you?”

But, in the middle of this financial mess, many economists are warning that the economic ripples of a Detroit failure would decimate businesses and communities far beyond Michigan.

Soon we’ll be running a longer piece detailing the reasons that the bailout option might prove far less costly for taxpayers than allowing the companies to go under.