Tuesday, March 31, 2009

GM's ousted CEO eligible for 20M retirement package

I must admit that I had some serious Schadenfreude when I heard that Waggoner was stepping down from GM last week.

Today I have angst and outrage over this story detailing his retirement package. It posted an hour ago on my mobile device via CNN - I cannot link to the story so I am pasting it in its entirety here:

"General Motors' outgoing chief executive Rick Wagoner is eligible to receive more than $20 million in his retirement package, according to a filing with the Securities and Exchange Commission.Wagoner announced Monday he was resigning at the request of the Obama administration, which has prodded GM to restructure as the company receives government financing to stay afloat.

Although Wagoner is not eligible for any severance pay upon leaving GM, he is eligible for hefty retirement benefits."He has worked for GM for nearly 32 years, and he would be entitled to certain vested awards, deferred compensation, and pension and other post-retirement benefits," GM said in a statement.Upon Wagoner's departure he will be eligible for both a salaried retirement plan and an executive retirement plan, which at the end of last year totaled approximately $20.2 million, GM spokeswoman Julie Gibson said.Most of it would be paid out as an annuity over five years, with the remainder as a small lifetime annuity, Gibson said.

Wagoner hasn't yet officially left the company and has not received any of the retirement compensation. What will actually be paid to him is still being reviewed, GM said.Paul Hodgson, senior research associate at The Corporate Library, which analyzes corporate governance and pay, said if Wagoner is contractually entitled to the compensation, GM couldn't insist on withholding it.Wagoner will not comment on the matter, Gibson said. The United Auto Workers also said it had no comment on Wagoner's compensation.

Wagoner said late last year he would accept a $1 annual salary if the federal government would come through with billions of dollars in loans for GM. The loans came, and Wagoner's $1 salary commenced January 1, according to a filing with the SEC.The federal government has loaned $13.4 billion to GM and $4 billion to fellow struggling automaker Chrysler, and on Monday, President Obama gave failing grades to both companies for their turnaround efforts. He said the government would give GM "adequate working capital" over the next 60 days, during which GM must prove it can "restructure in a way that would justify an investment of additional taxpayer dollars."Chrysler will be given adequate capital to continue operations for 30 days while completing a merger with Fiat.Wagoner became CEO of GM in 2000. Before that, he was chief operating officer and led the company's North American operations. He also served as chief financial officer from 1992 to 1994."

No wonder the auto industry is in such a bloody mess! Twenty million dollars in a retirement package? On what planet is that even acceptable? Of course these CEO's can afford to accept a paltry $1 salary - they think that we the public have forgotten all about their bonuses, stock options and retirement packages that they continue to draw from during times of financial duress for their companies - I am outraged and we all should be! Maybe it is true - maybe GM was beginning to turn around under Waggoner, but after reading the story, methinks they/we are all better off without him. Mr. Waggoner will have earned about 3/4 of a million dollars for each of his 32 years of service - talk about overpaid!

All things being equal, even the President who can do a marginal job - think GW Bush - can hardly earn that amount with speaking engagements post White House - why on earth is it acceptable for a CEO to receive not a golden parachute, but a platinum and diamond encrusted parachute in this case? How much is too much and when is it ever going to be enough?

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