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

Teddy, an English bulldog, models Zentek Clothing’s heat regulating dog jacket. (Ian Terry / The Herald)
Everett clothing company keeps your dog cool and stylish

Zentek uses space-age fabrics to moderate the temperature of pets and now humans.

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

Providence said to be in talks for merger with Ascension

The two Catholic health organizations have been exploring joining forces, sources say.

Hospital companies merge as insurers encroach on their turf

An anticipated deal between Providence St. Joseph Health and Ascension is only the latest.

DaVita to sell off medical groups including The Everett Clinic

Another round of health care consolidation means The Everett Clinic could soon get new ownership.

Engine trouble hits Air New Zealand’s 787 Dreamliners

A Rolls-Royce engine was shut down and was afterward found to be seriously damaged.

Washington, Amazon sue company over seller training programs

Braintree is accused of using deceptive ads promising information on how to make money on Amazon.

Lockheed-Martin dominates global arms sales, Boeing is 2nd

The combined sales of U.S.-based companies totaled $217 billion.

The Marine Corps’ version of the F-35 Joint Strike Fighter is designed to land vertically like a helicopter. (Lockheed Martin)
F-35 fighter costs, $1 trillion over 60 years, draw scrutiny

Pentagon’s ability to repair F-35 parts at military depots is six years behind schedule.

Most Read