GM CEO’s 2012 pay package increased 44 percent

DETROIT — General Motors Co. boosted Chairman and CEO Dan Akerson’s pay package by 44 percent last year, as the value of his stock awards significantly increased due to a change in the way the automaker paid out the shares.

Akerson, 64, earned $11.1 million in salary and stock awards last year, compared with $7.7 million in 2011. His annual salary remained steady at $1.7 million but his stock awards rose to $9.3 million from $5.9 million in 2011. The numbers were revealed in GM’s annual proxy statement filed Thursday with regulators.

The compensation increase came even though GM’s 2012 earnings fell $2.7 billion from 2011. The company made $4.86 billion last year, hurt by a $1.7 billion loss in Europe and weaker profits in North America. However, GM’s stock price jumped 38 percent during the year to finish 2012 at $28.83.

GM linked the substantial increase in Akerson’s pay package to a change in the mix of how he is paid. The automaker decided to grant him more salary stock than restricted stock, in case Akerson chooses to retire before the three-year vesting period for restricted shares is complete. GM said in its filing that Akerson’s total compensation remains in the bottom 10 percent of executives in comparable positions because of government pay restrictions, “despite his significant contributions to operating performance and outstanding leadership.”

Akerson, a former telecommunications and private equity executive, replaced Ed Whitacre as GM CEO in September 2010 and became board chairman in January 2011. GM has complained that pay for Akerson and other executives isn’t competitive with personnel at similar companies because of government restrictions.

The Treasury Department limits GM executive pay because the company took $49.5 billion in government bailout funds in 2008 and 2009. The government got GM stock in exchange for the bailout money, and it has pledged to sell the remaining shares by early next year. When the government stake is fully sold, the pay restrictions will go away. So far the government has recovered about $30.4 billion of the aid, meaning taxpayers are $19.1 billion in the hole.

GM also disclosed in the filing that the government still owns 241.7 million shares of GM stock, or 16.4 percent of the company. The shares would have to sell for around $79 each for the government to break even, more than double the current trading price. The government remains the company’s largest stockholder, followed by the fiduciary for a union trust fund that pays retiree health care bills.

The Associated Press formula calculates an executive’s total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest that the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.

The value that a company assigned to an executive’s stock and option awards for 2012 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company’s stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.

GM also said Thursday that it will hold its annual meeting on June 6 in Detroit.

GM shares were up 26 cents to $30.71 in afternoon trading. The stock hit its one-year high of $30.80 on Wednesday.

More in Herald Business Journal

Boeing outmaneuvered? Airbus takes Bombardier under its wing

Airbus will buy a controlling stake in Bombardier’s C Series airplane — and build it in Alabama.

Nordstrom suspends buyout after struggling to get financing

A buyout was meant to help the company continue turnaround efforts outside the glare of market scrutiny.

More self-awareness could help build a better medical system

Marcy Shimada of Edmonds Family Medicine writes the second in a series about fixing our health care system.

Scratch-and-sniff brochures aimed to prevent disaster

Puget Sound Energy has distributed more than a million scratch-and-sniff brochures to… Continue reading

Jewelry, accessories store Fuego opens second site in Snohomish County

Northwest-based jewelry, accessories and gifts store Fuego opened a new outlet store… Continue reading

Extreme cleaning company Steri-Clean opens in Mukilteo

The first Washington franchise of the Steri-Clean company will celebrate its grand… Continue reading

Justices to hear government’s email dispute with Microsoft

A lower court ruled emails in a drug case couldn’t be searched because they were in Ireland.

Waiting to upgrade to the iPhone 8? You’re not alone.

The older model iPhone 7 is enjoying a new sales bump while the new iPhone 8 isn’t flying off shelves.

Most Read