"What was CEO Rick Wagoner's salary in 2006? In 2007? What will it be in 2008? Hmmm — I wonder if GM will cancel all of his health insurance when he reaches the age of 65...which is what the company did to my 79-year-old mother and God only knows how many other retirees and their spouses ... Angry? You bet I am."
Such a simple question. What is Rick Wagoner's reward for posting huge losses while slashing jobs, wages and benefits?
Turns out it's not so simple, but let's try and get a handle on it.
Effective March 1, 2006, Wagoner agreed to cut his $2.2 million annual salary in half. That meant his new salary was around $1.1 million a year.
Then, in 2007, G.M. announced Wagoner would “continue” to draw a "reduced" salary. Here’s where it gets a little tricky. The new salary was not based on the $1.1 million he’d earned the previous 12 months. Instead, it was based on what he made before the March 2006 reduction.
That worked out to a 2007 salary of $1.65 million a year. In other words, he got a raise, despite claiming he was drawing a "reduced" salary.
Mark Stein at portfolio.com does an excellent job of showing that Wagoner's pay "cut" didn't necessarily mean less money. He also points out that salary only accounted for 17 percent of Wagoner's total compensation:
“The remaining 83 percent of his $10.1 million annual pay package comes in the form of stock awards, option awards, pension sweeteners, and $769,566 in ‘other’ compensation (life insurance, financial planning, personal travel on the corporate jet, bodyguards, and dividends on restricted stock).
Then, in March of this year, G.M. announced that Wagoner “will earn a salary of $2.2 million in 2008, restoring his base pay to the level it was before he took a 2006 pay cut as part of the company's turnaround plan,” according to the Associated Press.
“Wagoner is eligible for up to $3.5 million in incentive payments and a grant of 165,563 shares of GM stock if he meets the internal targets,” according to the AP. “He will also receive 500,000 stock options that will vest over three years and 75,000 restricted stock options that will vest in three to five years.”