Pay Czar Removes Salary Cap for GM's New Hires; Who Is GM's $500k Man?

by Robert Farago

Published: November 13th, 2009

pay czar removes salary cap for gm s new hires who is gm s 500k man

Automotive News [sub] reports that President Obama’s Pay Czar has done an about face. Kenneth Feinberg pledged to remove the $500,000 salary cap for NEW executives hired for TARP-recipients—if he’s convinced that a rule-busting pay boost would help the bailout queens return U.S. taxpayer’s money. Feinberg’s climb-down comes just two days after New GM’s federally-appointed Chairman of the Board said that Uncle Sam’s pay caps could be, indeed should be, “modified.” Of course, Ed Whitacre didn’t make his suggestion directly. Nor did Feinberg reveal the locus of his “come to Jesus with cash” moment. “[Feinberg] said the automotive firms did not appeal his rulings. But he said he would be open to requests to hire in new executives at competitive pay. ‘If General Motors or any other company wants to bring someone in laterally — laterally — and competitive pay packages require that lateral hires get certain competitive pay, what have you, we’re perfectly willing to examine that.'” So the new rule: GM can hire someone for more than $500,000 in cash per year if that person was already making $500,000 per year doing the same job, only better (one would hope). Which would exclude, uh, no one. And create mucho resentment at that special place where RenCen’s express elevators ascend to glory. More Feinbergian 180 after the jump, and a mystery to be solved . . .

Feinberg said he would measure his success in determining appropriate pay levels for the bailed-out firms by their repayment of taxpayer money.

“There is nothing more important than the fact that these companies repay,” Feinberg said. “The secretary of the Treasury has made it very clear that we must keep these companies in business, thriving, so that the taxpayer can get repaid.”

So what was the point of the pay caps in the first place? Street theater, of course. But still, you’d expect the show to last more than four weeks. Never mind; I thought pay caps were a dangerously stupid idea, even for a nationalized multi-national. Performance requirements, that’s what the TARPIE-fed suits need. More importantly, transparency! After all, if we know what they’re doing for the money—OUR MONEY—-we can know if they deserve our support. Sort of like, I dunno, owners of any other publicly-held company.

So here’s what I want to know: who is the mystery man within GM ranks who gets paid more than $500,000? We now know GM CEO Fritz “I’m a Goofy Goofer” Henderson is getting $950,000 per year. BUT WHO IS THE OTHER GUY?

Cash salaries for the top GM executives were cut by 31 percent, and only one unnamed executive besides Henderson will be paid more than $500,000 for 2009.

As a taxpayer and GM owner, I demand to know which other GM suit is more equal than the others. Is it Lutz? Tell me it’s not Lutz. I know it’s Lutz. It’s Lutz, right? Gotta be. The Pay Czar exempts the failed Car Czar. It’s . . . kismet. Tell me I’m wrong. No? FOIA you, then.

#Bailout #BobLutz #Compensation #EdWhitacre #FritzHenderson #GM #KennethFeinberg #PayCzar #SalaryCap #SalaryLevel

Robert Farago

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2 of 8 comments

Stuki on Nov 13, 2009

Social workers do a perfectly acceptable job of handing out taxpayer money to predominantly Democratic contituencies, and for a whole lot less than half a million a year.

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Dynamic88 on Nov 13, 2009

I remain unconvinced that more money attracts top talent. If that's true, why did GM go into BK? Why has GM lost so much market share the past 4 decades?

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