U.S. Treasury failed to curb excess 2012 pay at GM, Ally, watchdog says

[ne_one]

U.S. Treasury failed to curb excess 2012 pay at GM, Ally, watchdog says
Automotive News
January 28, 2013

The U.S. Treasury Department "failed to rein in excessive pay" at bailed-out General Motors, Ally Financial Inc., and American International Group Inc., the rescue program's inspector general said.

Sixteen of the 69 top employees at the three companies had 2012 pay packages worth at least $5 million and all but one had total compensation of $1 million or more, the Special Inspector General for the Troubled Asset Relief Program said in a report today.

Since much of the compensation is in stock, only three of the executives had cash salaries of more than $1 million.

Despite previous warnings by the special inspector general that the Treasury "lacked robust criteria, policies and procedures" to curb excessive pay, the department "made no meaningful reform to its processes," according to the report.

The Treasury's decisions "were largely driven by the pay proposals" made by GM, Ally and AIG, according to the watchdog known by the acronym SIGTARP.

Full article at link.

[BlackGTP]

I'm torn on this. I am against the excessive pay we see for executives; but GM needs to attract top talent to turn things around. How is GM going to attract or keep the best if the pay isn't even close to market.

I think a more reasonable approach would have been to cap the salaries at the average for like companies.

[spd98]

I really think they are trying to make a big deal out of nothing. It specifically states that most of the value was in stock, that is at risk pay. You have to play the game and with where these companies were coming from they need to pay to get the best talent. It seems to me paying in stock is the way to go as it directly reflects performance.

[zinner]

You can't hope to address excessive executive pay on a one by one basis.

[Neanderthal]

NOOOOOO!!! Maybe lil Timmy thought it was his income taxes again? Just sayin.

[bmwboy2007]

Executive compensation is out of whack in the US. In 1940 CEO pay ratio to average worker was 12:1 By 1980, the ratio had crept up to 40:1. Now, it's in excess of 400:1 There's a serious problem in that area. Germany compares at 14:1, Japan at 18:1

[balthazar]

"the Gov't couldn't do the job" - wow; whatta shock. They got themselves a raise just recently tho, THAT they got done fine.

[spd98]

Executive compensation is out of whack in the US. In 1940 CEO pay ratio to average worker was 12:1 By 1980, the ratio had crept up to 40:1. Now, it's in excess of 400:1 There's a serious problem in that area. Germany compares at 14:1, Japan at 18:1

A good part of our issue here is driven by the government. Regulations and acts like Sarbanes oxley have driven liability to executives and their pay reflects it.

[germeezy1]

The stories I read of executives like Akerson being granted a position based on the fact that he was the only one who would consider it are far worse than a few executives making a tad too much money. Personally I believe every dime of executive compensation should be tied to performance, and quite frankly there is much to do as far as GM is concerned.

[Engelman]

This is pure BS.....Lets look at some facts...,

Alan Mulaly(CEO of Ford) took home $28.9 million in 2012...the highest in the industry..

Behind Mulally but leading the rest of the world's automotive CEOs in pay was Martin Winterkorn of Volkwagen AG. Winterkorn received $23.1 million, a sum that seemed to match VW's prodigious profit of $19.6 billion, second highest among all automakers after Ford. Winterkorn's Mercedes counterpart in Germany, Dieter Zetsche, was paid $11.4 million for the year.

Sergio Marchionne, whose wizardry so far has saved Chrysler and Fiat from liquidation, earned $16.2 million last year. He will need even more magic going forward because the two companies, which are in the process of becoming one, don't build enough vehicles to be a sustainable enterprise. That judgment is Marchionne's, who has called for closure of excess automaking capacity in Europe -- so far with little result.

In the U.S. the smallest paycheck was drawn by General Motors (GM) CEO Dan Akerson. In spit of this.....


"General Motors is performing at its highest levels in years with a string of 11 profitable quarters and soon will have one of the industry's newest product lineups, while complying with all TARP restrictions and Special Master's decisions," GM said in a statement today responding to the watchdog report."

[Butz]

They couldn't do that with AIG either, took our tax money and gave themselves bonuses. Is the government and unions corrupt and greedy? yes, but wall street can still give them a lesson in true greed.

[63GrandSport001]

I'm torn on this. I am against the excessive pay we see for executives; but GM needs to attract top talent to turn things around. How is GM going to attract or keep the best if the pay isn't even close to market.

I think a more reasonable approach would have been to cap the salaries at the average for like companies.

simple, just hire a bunch of Japanese execs to run the company..... CEO would be super happy to get 1.5 million a year.

[jpd80]

This is pure BS.....Lets look at some facts...,

Alan Mulaly(CEO of Ford) took home $28.9 million in 2012...the highest in the industry..

And nearly all of that remuneration was performance based and
link to stock options that are triggered at predetermined levels.

The government should go put their heads in the garden because
that's the only way they will ever grow anything with their ideas..

[spd98]

This is pure BS.....Lets look at some facts...,

Alan Mulaly(CEO of Ford) took home $28.9 million in 2012...the highest in the industry..

Behind Mulally but leading the rest of the world's automotive CEOs in pay was Martin Winterkorn of Volkwagen AG. Winterkorn received $23.1 million, a sum that seemed to match VW's prodigious profit of $19.6 billion, second highest among all automakers after Ford. Winterkorn's Mercedes counterpart in Germany, Dieter Zetsche, was paid $11.4 million for the year.

Sergio Marchionne, whose wizardry so far has saved Chrysler and Fiat from liquidation, earned $16.2 million last year. He will need even more magic going forward because the two companies, which are in the process of becoming one, don't build enough vehicles to be a sustainable enterprise. That judgment is Marchionne's, who has called for closure of excess automaking capacity in Europe -- so far with little result.

In the U.S. the smallest paycheck was drawn by General Motors (GM) CEO Dan Akerson. In spit of this.....


"General Motors is performing at its highest levels in years with a string of 11 profitable quarters and soon will have one of the industry's newest product lineups, while complying with all TARP restrictions and Special Master's decisions," GM said in a statement today responding to the watchdog report."

I agree with you 100% and look at the ratio's of salary verses "at risk" like stock GM is getting it's money's worth and more from it's leadership. Even though I think there have been some real boneheaded decisions made at high levels (like rushing the Malibu launch). And I'm sure some of those are calculated gambles, sometimes they pay off sometimes not, it's often risk verses reward.

[solman98]

"the Gov't couldn't do the job" - wow; whatta shock. They got themselves a raise just recently tho, THAT they got done fine.

If your talking about the "gov't", there is a possible .5% raise that may happen later this year, but I doubt that will happen either. Government employees haven't had a raise since 2010. That includes those not in politics.