Posted by: David Kiley on November 18, 2008
Senate Banking Committee chairman Chris Dodd told CEOs of the Big Three automakers today during auto industry bailout hearings that their compensation will be an issue for lawmakers who will deliberate whether or not to lend them $25 billion or more in the coming weeks.
Dodd asked the CEOs, after telling them it was unlikely that there would be positive action on any loan program this week, to examine what symbolic measures they are willing to offer up to the public and to members of Congress who oppose bailing out the auto industry.
Dodd singled out the $210 million golden parachute that Chrysler CEO Bob Nardelli received when he left Home Depot before taking over as CEO of Chrysler. “I can’t tell you how many times my constituents come up to me and talk to me about this.” When they read, Dodd said, that the executives of failing companies are making these multi-million contracts and simultaneously asking for tax payer money, it infuriates them.”
Nardelli said Chrysler may fall below the cash liquidity it needs to operate by the end of the year.
Ford CEO Alan Mulally said that bonuses were cut at Ford. But Dodd singled out the CEO’s $28 million pay in 2007.
Wagoner offered to Montana Senator Jon Tester that he had taken a 50% paycut. What he left out was that his total compensation has gone up up the last three years through grants from the board over which he serves as chairman. Wagoner’s pay was $5.5 million in 2005, $10.2 million in 2006 and $15.7 million in 2007. So, quite literally, the worse GM does, the more Wagoner has earned.
Ford CEO Mulally famously earned $39.1 million in 2006 for four months work. In 2007, he earned $21.7 million.