Tuesday, May 01, 2007

GM's Wagoner Gets $10.2 Million in 2006 Total Pay

GM's Wagoner Gets $10.2 Million in 2006 Total Pay (Update4)
By Jeff Green and Greg Bensinger

April 27 (Bloomberg) -- General Motors Corp., the largest U.S. automaker, said Chief Executive Officer Rick Wagoner's total compensation for last year was $10.2 million, as the company narrowed its loss.

Pay for Wagoner, 54, included $1.28 million in salary, $769,566 in other compensation, and stock options and awards valued at $6.67 million, the company said in a U.S. regulatory filing. Detroit-based GM also is proposing two new board members.

Wagoner's salary was 42 percent less than the $2.2 million he got for 2005, because of a 50 percent pay cut he agreed to in February last year. GM said today that Wagoner's salary for this year will be $1.65 million, restoring half of the cut.

``Maybe it's a little too early for a salary increase, but the automaker has made a lot of progress over the last year,'' said Mirko Mikelic, who helps manage $14 billion at Fifth Third Asset Management in Grand Rapids, Michigan, including GM debt. ``The union also made a lot of sacrifices so maybe it would be better for salaries to be flat going into negotiations'' that start in July for a new contract with the United Auto Workers.

The compensation details come three days after Wagoner learned that Toyota Motor Corp. had unseated his company as the global auto-sales leader in the first quarter, threatening GM's 76-year reign. GM's shares rose 58 percent last year, the most of any company in the Dow Jones Industrial Average. The company's net loss narrowed to $2 billion from $10.4 billion in 2005.

GM has shifted more of Wagoner's 2006 and future compensation from salary and direct pay to pay based on the company's performance, spokeswoman Renee Rashid-Merem said. About 83 percent of his 2006 pay was ``at risk,'' GM said in the Securities and Exchange Commission filing.

Proposed Directors

The automaker is proposing the election of new board members Errol Davis and Kathryn Marinello. Davis, 63, is chancellor of the Georgia state university system and a director of BP Plc, Union Pacific Corp. and PPG Industries Inc. Marinello, 50, has been CEO of Minneapolis-based Ceridian Corp., a provider of human-resources and payroll services, since October.

The SEC approved rules last year that require companies for the first time to provide a single figure for total compensation of their five top-paid executives and made other changes in the way stock options and stock grants are valued. The changes make it difficult to compare figures from the previous year.

GM a year ago reported Wagoner's total pay as $5.48 million for 2005, including stock options valued at $2.88 million. He hasn't gotten a cash bonus since 2004. Based on GM's adjustment to compare this year's options on the same accounting basis as last year's, his total 2006 compensation was about $4.88 million.

Stock Awards

GM disclosed March 22 that Wagoner received $2.8 million in restricted stock units this year, the first such grants since 2003, and 500,000 stock options. Those awards will be included in future compensation and aren't part of the filing today.

Shares at GM have risen 40 percent in the 12 months through yesterday and fell 89 cents to $31.56 at 4:21 p.m. in New York Stock Exchange composite trading.

Wagoner's 2006 total compensation is less than the $28.2 million that Ford Motor Co., the second-largest U.S. automaker, reported on April 5 for Chief Executive Officer Alan Mulally. Pay for Mulally, who took over at Ford in September after heading Boeing Co.'s commercial airplane business, included a $7.5 million hiring bonus and $11 million to make up for payments he would have gotten from the planemaker.

Lutz, Henderson

GM Vice Chairman Bob Lutz, head of product development, got $8.44 million in compensation, including $1.16 million in salary, GM said in the filing today. His 2007 salary, effective March 1, will be $1.32 million.

Chief Financial Officer Fritz Henderson, 48, received $5.19 million in compensation, including $1.16 million in salary. Henderson took over as the top financial executive in January. His 2007 salary will also be $1.32 million.

Lutz, 75, and Henderson agreed to 30 percent pay cuts in February last year. Salaries for Lutz and Henderson are still 15 percent lower than they were at the start of 2006.

Wagoner has promised to cut $9 billion from North American costs this year as part of a plan to close 12 North American locations and end losses. GM last year persuaded 34,400 union workers to either accept incentives to retire or leave.

The automaker's shares have fallen 54 percent since Wagoner took over as CEO in June 2000. Wagoner's salary was $2 million in 2001, his first full year in the top job. He got a raise to $2.2 million for 2003 and received that annual amount until accepting the pay cut last year.

GM's $12.4 billion in losses the past two years were its first consecutive annual losses since 1990 to 1992.

The company has sold assets totaling more than $17 billion to fund its restructuring plan. Wagoner hasn't forecast when GM will return to profit.

Wagoner and other top GM executives have been restricted from buying or selling GM shares since April 2005 when the automaker abandoned a profit forecast for the year. GM hasn't given financial forecast since.

To contact the reporters on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net ; Greg Bensinger in New York at gbensinger1@bloomberg.net .

Last Updated: April 27, 2007 17:53 EDT

2007 Bloomberg LP

2007 Bloomberg LP


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