Don't Worry: GM Hasn't Shortchanged Mary Barra

Is General Motors Chief Executive Mary Barra the latest victim of the gender pay gap?

Barra’s historic promotion, making her the first woman ever to run a major automaker, was remarkable enough to merit a mention during the State of the Union address. President Obama invoked “how the daughter of a factory worker is CEO of America’s largest automaker” as an example of the opportunities available in America.

So when Fox Business crunched the numbers and concluded that Barra would be paid only a fraction of what her male predecessor made, disappointment and outrage understandably ensued. Like millions of other women before her, it looked as if Barra would be earning less than her male peers for doing the same job.

The board agreed to pay Barra $1.6 million in annual cash base salary, according to SEC filings, and she will be eligible for another $2.8 million under a “short term incentive plan.” Her predecessor in the top job, former Carlyle executive Daniel Akerson, received $1.7 million in salary and an additional $7.3 million in stock last year. When you put all the numbers together, Fox and others concluded that Barra will be making 52 percent less than Akerson.

As is often the case, however, reality is a little more complicated than the quick math.

What the above calculation leaves out is possibly the greatest portion of Barra’s compensation: stock awards tied to company performance. For many executives, their base salary is just the starting point; long-term stock options can make up the majority of what they take home. Just ask JPMorgan Chase CEO Jamie Dimon, who is eligible for up to $34 million in stock options this year, compared with a $1.5 million base salary. Or ask Akerson, for that matter, whose roughly $9 million in total compensation was made up mostly of stock.

Akerson’s compensation was determined by the U.S. Treasury as one of the conditions of the 2009 bailout that saved GM from collapse. Since the government has sold off the last of its GM shares, the company is reworking its compensation plan—including Barra’s long-term stock awards—and is expected to announce the details at its annual shareholder meeting in June. If there is a time to do a comparative analysis, that will be it.

Meantime, as Bloomberg Businessweek’s Tim Higgins and Bryant Urstadt pointed out in a December cover story, GM looks stronger now than it has in decades. The company turned profits over the last three years and is expected to earn about $6 billion in 2013, according to one analyst.

This would seem to leave them little room for GM’s board to pay Barra anything less than a male boss would receive.

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