General Motors Co. (GM:US) Chief Executive Officer Mary Barra, who started the job last month, may receive total compensation this year of $14.4 million, $10 million more than the largest U.S. automaker previously disclosed.
Barra, who became the first female CEO of a global carmaker Jan. 15, may receive $10 million in long-term compensation as part of her package, the Detroit-based company said yesterday in a statement. That portion is subject to shareholder approval at GM’s annual meeting in June and the final amount depends on the company’s performance, GM said.
“The company released the full figures ahead of its proxy filing in April to correct misperceptions created by comparisons that used only a portion of Barra’s overall compensation,” GM said in the e-mailed statement.
GM in January said Barra, 52, would earn $1.6 million in salary and $2.8 million as part of the company’s short-term incentive plan. While the automaker said at the time that she was likely to receive additional compensation as part of the new long-term incentive plan, it was criticized as paying her a fraction of what her predecessor received.
Barra, previously the automaker’s top product officer, succeeded Dan Akerson who stepped down last month to take care of his sick wife. Akerson earned $11.1 million in 2012. He remains at GM as a senior adviser and is eligible to receive a pay package worth as much as $4.68 million this year. He’s expected to stay less than a year, GM has said, and his compensation will be prorated.
Function of Performance
“As a new CEO, Mary’s total compensation is in line with her peer group and properly weighted so that most is at-risk,” Tim Solso, GM chairman, said in the statement. “The company’s performance will ultimately determine how much she is paid.”
After appearing at President Barack Obama’s State of the Union speech in January, Barra’s compensation package received criticism by some media outlets. “Why does GM think Barra’s value as its CEO is currently worth 52% less than Akerson’s?” Elizabeth MacDonald wrote on Feb. 3 on Foxbusiness.com.
Congresswoman Louise Slaughter, a Democrat from New York, who issued a statement last week critical of Barra’s pay, saying the “salary disparity underscores need to address gender pay gap,” yesterday sent out a tweet that read: “Happy to see” that Barra is “earning a salary equal to that of her male counterparts & reflecting her contributions.”
GM rose 1 percent to $35.23 at 9:30 a.m. in New York. The shares had fallen 15 percent through yesterday’s close, while the Standard & Poor’s 500 Index slipped 2.6 percent.
Compensation for other global automaker CEOs varies widely. Ford Motor Co. (F:US) CEO Alan Mulally received about $21 million in compensation in 2012, according to Ford’s proxy.
Toyota Motor Corp. (7203) President Akio Toyoda received 184 million yen ($1.8 million) in 2012 while Volkswagen AG Martin Winterkorn was paid 14.5 million euros ($19.8 million) and Daimler AG (DAI)’s Dieter Zetsche got 8.15 million euros.
Barra’s package being weighted toward long-term performance is smart corporate governance, said Maryann Keller, an auto-industry consultant who has served as a director at Dollar Thrifty Automotive Group Inc. and Lithia Motors Inc.
“The number here is a fine number and appropriate,” she said yesterday in a telephone interview. “A package that pays out based upon long-term performance is very sensible in an industry that is cyclical.”
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