"Bailout Baby" General (Government) Motors Chief Executive Officer Makes Off With $9 Million Per Year

Since General Motors is the beneficiary of a $49.5 billion federal government bailout and as the government retains ownership of 19% of the “new” GM’s stock, the entity is subject to government approval of executive compensation levels.  This has not halted GM from providing compensation packages to its chief executive officer which are lavish by any standard.

GM CEO Dan Akerson has received a whopping $9 million per year for 2011 and 2012, and is to receive the same amount for 2013. I would estimate this king’s ransom to be roughly two hundred times the compensation of the average GM rank and file worker.

Mr. Akerson had the audacity to be critical of pay restrictions placed on the company, asserting that it keeps GM from attracting “high-level leadership talent”, citing competitor Ford, which paid an obscene $29.5 million to former CEO Alan Mulally in 2011 as well as showering him with $58.3 million in company stock as a reward for Ford’s turnaround. (A shameful note which comeas to mind from another industry is the following:  As her company’s stock sank and the fortunes of the company plummeted, former Talbots’ Chief Executive Officer Trudy Sullivan carted off $6 million in compensation for 2010 and exited with a $5 million severance bundle, apparently with no humiliation or embarrassment endured.)

What business is it of ours that GM’s Chief receives $9 million per year?  It is very much our business as the company received a sweetheart government deal which enabled it to stiff its stockholders and bondholders while providing benefits to the United Auto Workers’ Union and company executives.

The lavish paydays Messrs. Akerson and Mulally have engineered for themselves help to explain why there is growing contempt for those that sit in the corporate boardroom, which I believe serves to sow the seeds of future civil unrest.  The day may come when the “have nots” recognize what a raw deal they have received in order to feather the nests of the “haves” with more money than they could ever hope to spend.

Ethics in corporate governance existed in “the good old days”.  Those days are gone.  Today’s credo, seemingly adopted by virtually every top corporate officer is,
“Milk it for all you can without regard to whether you produce a positive result for the company and its shareholders.  The heck with “the little people”.