General Motors CEO Dan Akerson — who gave up more than $100 million to leave Carlyle Group to helm the Detroit automaker — has no criticism of the pay of his fellow auto CEOs.
In a Detroit News interview Friday, Akerson recounted that the Treasury Department — which oversees pay at GM as part of the government’s $49.5 billion auto bailout — had told him that his pay was in the bottom 10 percent of CEOs of similarly sized companies.
Akerson had asked the unions to freeze salaries for four years and he asked the management to do the same. As a result, Akerson will get no pay raise over his $9 million in total annual compensation. “I think it’s unethical for a CEO to take a raise,” Akerson said, when others are getting a pay freeze. “I get paid plenty, quite candidly.”
Akerson said he looked at some lavish CEO pay packages and said they were a “source of amazement.”
Ford Motor Co on Friday disclosed CEO Alan Mulally’s total compensation of $29.5 million for 2011, up 11.3 percent over 2010. The company disclosed this month that he received $58.3 million in company stock this week as part of a 2009 long-term incentive pay package. Ford executive chairman Bill Ford Jr. received total compensation of $14.6 million for 2011.
Mulally received 4.82 million shares of stock, but Ford withheld 1.97 million shares to pay the taxes on the stock award. After taxes, Mulally received 2.86 million shares of stock worth $34.5 million after taxes. Mullally received $26.5 million in total compensation for 2010.
Chrysler-Fiat CEO Sergio Marchionne received about $22 million in pay from Fiat and its Fiat Industrial subsidiary for 2011, but no pay from Chrysler. Chrysler is no longer under pay restrictions imposed by the Treasury since the government exited last year.
Akerson said Mulally and Marchionne praised both of his rival CEOs. “I really think they did a great job — both of them,” Akerson said. “Alan saved that company. Sergio has resurrected that company and it’s a different calculus for everyone. For me right now, it wouldn’t be right.”
In a Detroit News interview last month, Ally Financial Inc. CEO Michael Carpenter complained about the “severe” and “bizarre” pay restrictions under the Troubled Asset Relief Program that now only covers AIG, GM and Ally. A so-called “pay czar” oversees pay at the three companies. The Detroit-based auto and mortgage lender is 74 percent owned by the Treasury as part of a $17.2 billion. He noted that the “TARP stock” that executives get “is not leveraged to huge upside equity performance.”
Carpenter receives no cash as part of his $9.5 million salary in 2011. He joked that “not too many” CEOs receive no cash. He lamented that he can’t relocate people or match higher pay offers. Ally took the average employee’s pay “up meaningfully” in 2010, but Carpenter couldn’t increase the pay of his top team “at all.”
“I don’t have the degrees of freedom that a chief executive of a company would have. That’s reality,” Carpenter said, saying it is “not terribly helpful.”
Carpenter says he has asked the Treasury pay regulators if they realize that the team at Ally isn’t responsible for the problems. They get hung up on issue of rewarding people who made mistakes.
The management team at Ally is all new, he says.
”The answer is, ‘They didn’t cause the problem. The folks that caused the problem — they’re gone,’” Carpenter said. “This is a new team trying to clean it up. Don’t you want them to be motivated and engaged?”
Carpenter noted that Ally won’t get out from under the restrictions until the government sells all of its stake — something that is also true for GM. Carpetner recounted a conversation with GM’s Akerson. “He says, ‘If I get down to 10 percent ownership, maybe I can get rid of these guys?’
Carpenter laughed and retorted. ”If they own one share, they can torment you for the rest of your life,” he said.