Oct. 24 (Bloomberg) -- General Motors Co. Chief Executive Officer Fritz Henderson will step up efforts to hire outsiders for chief financial officer and other positions in the department the former auto task force chief called the “weakest,” said people familiar with the matter.

The Detroit automaker is recruiting for CFO and dozens of open lower-level jobs, said the people, who asked not to be identified because the plans are private. CFO Ray Young, who succeeded Henderson and reports to him, is expected to be reassigned to help run GM’s international operations, three of the people said.

“What they’re trying to do is put together a management structure that’s more oriented toward a change in vision,” said Stephen Spivey, a senior auto analyst at consulting firm Frost & Sullivan Inc. in San Antonio. “I wouldn’t be surprised to see them bring in people from outside of the auto industry and see if they can have some type of cultural impact.”

Henderson can speed up hiring after Kenneth Feinberg, the government’s special master on pay, unveiled restrictions Oct. 22 for GM and six other companies that received a taxpayer rescue. The GM CEO’s cash salary was cut 25 percent, a person familiar with the matter said. His total compensation rose fourfold because he was granted stock and restricted stock.

‘Weakest Finance Operation’

“It allows us to hire the strong outside talent we need such as the role left open by Susan Docherty’s promotion,” Renee Rashid-Merem, a GM spokeswoman, said yesterday of Feinberg’s guidelines. She wouldn’t comment on specific personnel plans.

GM has already said it will seek an outsider to replace Docherty as the head of the Buick and GMC brands. GM promoted her to U.S. sales chief this month, to replace Mark LaNeve, who is going to Allstate Corp. Of 42 job postings for experienced professionals on GM’s Web site, 31 are finance and accounting positions.

GM is pursuing “technical accounting talent” to build on existing resources, said Randy Arickx, a spokesman.

Steven Rattner, who led the auto task force that reorganized GM in a 40-day bankruptcy earlier this year, said this week in an article on Fortune magazine’s Web site that GM had perhaps the “weakest finance operation any of us had ever seen in a major company.” GM emerged from bankruptcy July 10, and Rattner left the task force three days later.

The U.S., which gave GM $50 billion to survive, owns about 61 percent of the reorganized company. In an Aug. 3 handover meeting between task force members and GM’s new board, the finance department’s weakness was a large part of a 30-page presentation on the automaker’s challenges, a person familiar with that meeting said last month.

New Position

Henderson, 50, is working to end losses of $88 billion since 2004 and revive sales amid the weakest U.S. auto market since the 1970s. He took over in March after the task force asked Rick Wagoner to step aside. Young, 47, has been CFO since March 3, 2008, when he succeeded Henderson.

Young is said to be set to take a job as a lieutenant to Nick Reilly, who heads up GM’s international operations in Shanghai. Young worked his way up through GM’s treasury and finance arms in North America, Europe and Asia before becoming president and general manager of the Brazilian unit in 2004.

GM reorganized its accounting department in 2006 by consolidating the controller and chief accounting officer jobs under Nicholas Cyprus and restated results back to 2000. GM previously said it found flaws in annual reports for 2006, 2005 and a revised 2004 filing.

‘Material Weakness’

In a May 8 regulatory filing, the last quarterly report before filing bankruptcy, the automaker said it continued to have “material weakness” in internal financial controls.

Members of the automotive task force also told the board at the Aug. 3 meeting about a lack of accountability in GM’s finance department and an inability by the department to produce timely information in areas such as cash flow that the Treasury’s group sought in designing the automaker’s rescue.

GM has been inhibited in hiring outsiders by the lack of pay guidelines from the U.S., Henderson has said. The rules are part of the Obama administration’s effort to curb cash pay and match compensation to performance at GM, Chrysler Group LLC and five financial companies that got aid from the Troubled Asset Relief Program.

Under the new rules, GM will boost Henderson’s total compensation, including shares in the new GM, to $5.45 million, a fourfold increase, a person familiar with the plan said.

Cash Pay Cut

Henderson’s $1.26 million cash salary will be cut to $950,000, said the person. He also will get $4.24 million of stock and restricted stock, Feinberg said in a letter to GM.

Henderson isn’t getting any stock now in closely held GM, which has said it plans to offer shares to the public in 2010. No executive has received stock compensation in about a year.

Henderson received a salary of $1.3 million and total compensation of $7.2 million when he was vice chairman and chief financial officer in 2007, GM said a March filing. His 2008 compensation totaled $1.71 million, reflecting the reduced value of some stock awards.

Cash compensation for top GM executives is falling by 31 percent from last year and total compensation decreases by 25 percent, Feinberg said in the letter. Chrysler’s cash pay decreased by 18 percent, while total compensation rises 24 percent, according to another letter on the Treasury’s Web site.

To contact the reporters on this story: Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net; Katie Merx in Southfield, Michigan, at kmerx@bloomberg.net.

Last Updated: October 24, 2009 00:01 EDT