GM and Chrysler Top Execs to Get 25 Percent Pay Cut

By Zack Newmark
October 23, 2009 4:50 PM
Filed Under: American, Chrysler, Corporate/Financial, General Motors

As part of a bold move to cut upper management pay at firms that received bailout funding, the U.S. government announced that they will slash executive salaries by 25% at General Motors and Chrysler. Deeper cuts were put in place at the automakers' financial businesses as well.

Compensation at Chrysler Financial was cut by 56%, while GMAC executives found 85% cut from their weekly paychecks.

Chrysler CEO Sergio Marchionne was not affected. The head of Fiat took no money from Chrysler for 2009. Any executive staying onboard at Chrysler will make no more than $500,000 cash, with bonuses and stock options also severely limited.

Despite the pay cuts, GM CEO Fritz Henderson may receive an increase in pay. Henderson stands to earn cash and stock compensation up to $5.5 million, much higher than his 2008 salary, but $2 million less than his 2007 deal.

Although critics condemn the decison by the government as being interfering, the slash was part of the agreement the firms made when they took funding from the Troubled Asset Relief Program in 2008. TARP funds were used by GM and Chrysler as operating capital, helping to stave off bankruptcy.

Source: freep.com

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Tags: bailout, Fritz Henderson, Sergio Marchionne, Troubled Asset Relief Program, TARP, GMAC

Comments

LeroisF40

October 23, 2009 5:19 PM

This is why we should have never let the Government bail them out. The overly high executive pay is just one of the shining examples of mis-managment and lack of foresight. If we jsut let the Capitalism Machine do its job the way it is intended to these people would be without jobs now. The Government has no Constitutional Right to impose its will on private sector pay just as it was Un-Constitutional to give tax payer dollars to a private sector business. I think that any business that runs unprofitable and makes pore investment decisions should fall by those decisions. Not be bailed out because they are to big to fail or that to many people would lose their jobs. Rather than save these grossly greedy companies and their executives why not lower small business taxes and drop the idea of healthcare so that these companies can hire people again. But seeing as how 37% of all Gov jobs are union I don't see that happening. Its amazing that less than 9% of all private sector jobs are union yet the Government took the peoples money to bail them out when it is obvious from the private sector that unions do not work.

autoficianado

October 23, 2009 5:27 PM

I think WCF is not the right place for your little tirade. I also have no problem with these cuts as the companies agreed to be governed by this when they took the money to prevent bankruptcy. I am happy to see the government imposing consequences for the failure of the executives to properly manage their companies. No government in Europe, the United States or elsewhere is going to sit back and do nothing while a large part of their economies fail.

Edited by user on October 23, 2009 at 5:29 PM

jerry05cod4

October 23, 2009 5:51 PM

i agree with the other two people here that this is not the place to be "heard"... it's about time these executives got some pay cuts... and as autoaficionado said, no government is gonna do nothing when its economy is falling apart.

elanmike

October 23, 2009 5:42 PM

I would agree that this is wrong place for these types of tirades. Being a business owner and a pilot for a major US airline (union) I can assure you that there are two sides to this coin. I really feel bad for Fritz only making 5.5 million.

carcrazy1234

October 24, 2009 8:33 AM

i say company before the owner. actually just for car companies. the entire company as a whole affects more people than the top CEO of the company. and "only" making 5.5 million? thats honestly more than enough for a CEO of a car company that went bankrupt. i say spend more money on the company itself, and bring it back to life and stop being selfish. 5.5 million is enough money to live off of. when the company prospers, so will its owners.

Dolomight 74-86

October 24, 2009 8:49 AM

I can only laugh at those greedy multimilionaire ceos. Although I can't help but wonder if this financial dis-incentive will cause a brain drain in the american car companies. Not that there was too much brain there to begin with (in comparison to the euro companies that is).

Xanavi23

October 27, 2009 3:47 PM

LeroisF40, its quite clear you have no clue, no basis on just what would have happened to AMERICA if the companies did "die". If the government were simpletons like you and didn't look at the big picture, the whole country would pay the price.

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