April 21 (Bloomberg) -- General Motors Co. paid Chief Executive Officer Dan Akerson $2.53 million for 2010, when he led the automaker through an initial public offering and its largest annual profit in more than a decade.
Akerson, whose pay is subject to government review, received $566,667 in salary and $1.96 million in stock awards and other pay, Detroit-based GM said today in a filing. Ed Whitacre, who served as chairman and CEO until September, earned $5 million last year, according to the filing.
The compensation for Akerson is less than one-tenth the package that Ford Motor Co. paid CEO Alan Mulally last year. GM raised $23.1 billion in a sale of common and preferred shares during its IPO in November, which reduced the U.S. Treasury Department’s stake to about one-third.
“These salaries are not outrageous for a company of GM’s size,” Charles Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware in Newark, Delaware, said in a telephone interview.
GM earned $6.17 billion of net income in 2010, the largest annual profit since its predecessor earned $6.7 billion in 1997. The comparison excludes a $127.1 billion profit in the third quarter of 2009, when GM accounted for its post-bankruptcy recapitalization. Mulally led Ford, based in Dearborn, Michigan, to a $6.56 billion profit last year, the largest since 1999.
GM is subject to executive compensation limitations after getting a $49.5 billion bailout in 2009. The U.S. Treasury will wait for GM’s first-quarter earnings before deciding whether to sell more of its investment in the nation’s largest automaker, a person familiar with the matter said this week.
Akerson, 62, said in December that some key executives were leaving the automaker because of government-imposed pay restraints.
“We have to be competitive,” Akerson said. “We’ve been able to attract great people. We’re starting to lose them now.”
GM said “appropriately recognizing and rewarding” executives and competing with other large multinational employers to attract and retain talent “is extremely difficult within the compensation constraints” imposed by the Troubled Asset Relief Program and its special master.
GM hired Chris Liddell, a former Microsoft Corp. executive, as chief financial officer last year with a compensation structure that was “specially designed to be competitive with that offered by his previous employer,” according to the filing. Liddell, who was paid $6.23 million last year, said in March he was leaving the company after 15 months on the job.
The Treasury can sell some of its remaining more than 500 million GM shares, which equals about 32 percent ownership, starting May 22. Officials are waiting for GM’s earnings and to see what happens to the stock when bondholders in GM’s bankrupt predecessor company receive shares as partial compensation for their losses, said the person, who didn’t want to be identified because the plans aren’t public.
GM rose $1.02, or 3.4 percent, to $30.95 at 4 p.m. in New York Stock Exchange composite trading. The shares have dropped 16 percent this year.
Mulally, 65, received a $26.5 million package for 2010 that included salary, bonus, stock, option awards and other pay. Sergio Marchionne, Chrysler Group LLC’s CEO, last year received so-called deferred phantom shares valued at $2.87 million as of Dec. 31 for his three-year term on the board, the automaker said in February. He didn’t receive a salary from Chrysler, which is operated by Fiat SpA.
United Auto Workers President Bob King will negotiate new contracts this year with GM, Ford and Chrysler. King, who has criticized Mulally’s pay, has said workers must share in the gains now that the automakers are recovering and be rewarded for the $7,000 to $30,000 in concessions they each gave up since 2005.
While the UAW’s agreements don’t expire until September, the union will seek early contract settlements in talks with the automakers this year, two people familiar with the plan said this week.
Akerson will receive $1.7 million in annual salary, $5.3 million in stock that pays out over three years and $2 million in restricted stock, GM said in a Sept. 10 regulatory filing.
Chairman, CEO Roles
GM said its board “may reconsider” its decision to have one person serving as both chairman and CEO. The board elected to have Akerson serve in both roles “in light of the advantages that resulted from combining the positions under Mr. Whitacre.”
Stephen Girsky, GM’s vice chairman of corporate strategy, received compensation of $3.71 million in 2010, including $416,667 in salary.
David Bonderman, the co-founder of TPG Capital, had his $200,000 annual retainer reinstated in August after requesting that it be reduced to $1 when he joined the board in July 2009. He received $91,478 in compensation from GM for the year, according to the filing.
GM plans to hold its annual shareholders’ meeting June 7 in Detroit.
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