agent Entrepreneur logo
MenuMENU
SearchSEARCH

GM's Lutz: Auto Executives Are Underpaid

February 13, 2010
3 min to read


ORLANDO, Fla. - General Motors Co.'s top 25 senior executives, whose pay packages are being reviewed by the Treasury Department, are "way, way, way" underpaid, Vice Chairman Bob Lutz said.

His comments came as Treasury officials review the 2010 pay for GM executives, whose salaries must be approved by the agency's pay czar, Ken Feinberg, The Detroit News reported. GM is among companies that have received billions in federal money under the $700 billion Troubled Asset Relief Program.

Ad Loading...

The executives' compensation is expected to include GM stock, which might start being sold to the public late this year. If the stock appreciates, top executives could be in for a windfall.

But right now, salaries are lagging the market for top executives, Lutz said in an interview with The Detroit News on the sidelines of the National Automobile Dealers Association annual convention.

"What you see is what you get, and it ain't a lot," said Lutz, who is delivering a keynote address at the 2010 International Automotive Roundtable in Orlando.

"All I know is, right now, we are given our responsibility. And given the rigors of the job and demands and the accountability, I would say we are being paid way, way, way below market."

The Treasury Department, which also is finalizing the pay package of GM's new CEO Edward Whitacre Jr. owns 61 percent of the Detroit automaker and invested $50 billion in the company.

Ad Loading...

A Treasury Department spokeswoman earlier this week said a decision on pay packages is due soon.

Feinberg had ordered a 25 percent pay cut for GM's then-CEO Fritz Henderson to $950,000 in October. Henderson resigned under pressure Dec. 1 and was replaced by Whitacre, who also is chairman of GM's board of directors.

Whitacre's pay eventually will be disclosed by the company in a voluntary Securities and Exchange Commission filing. The former AT&T CEO, who headed the company and its predecessors for 17 years, left in 2007 with a $158 million retirement package.

Feinberg ruled in October that salaries for GM's top 25 executives would drop by 31 percent, while total compensation would decline 20.4 percent. Just one other executive in GM's top 25, beyond the CEO, was to earn more than $500,000 in cash.

"Right now, that isn't a problem, but over time, clearly a company that under compensates senior executives is going to have a retention or recruiting problem," Lutz said.

Ad Loading...

Since Feinberg set pay limits last year, GM has hired a new chief financial officer, Chris Liddell, who will be paid in $750,000 plus stock awards.

Special adviser Steve Girsky, meanwhile, is being paid $1.1 million for sitting on GM's board of directors and for advising Whitacre. His pay includes $200,000 a year as a director and a monthly grant of salary stock valued at $75,000, or $900,000 a year.

The pay limits for GM's top executives are understandable considering the automaker's stay in bankruptcy court last summer, Lutz added.

"You can't go through Chapter 11 and come out the other side and expect to have all of the same perks and comps as you did before," he said. "We just hope it doesn't stay this way too long."

Lutz said GM needs to do a better job of scheduling production of hot-selling vehicles and balancing inventory.

More Industry

Photo of a retriever dog looking out of an open SUV window with a yellow Peugeot headrest on the top of the window below it
Industryby Hannah MitchellJuly 16, 2026

Gone to the Dogs

A Stellantis brand decided to have some fun with one of its SUVs’ design to address growing emphasis on family pets.

Read More →
Foreign Cars Italia dealership store in front of sunset
Industryby Hannah MitchellJuly 2, 2026

Luxe N.C. Dealerships Change Hands

A collection of Italian and English brand franchises were handed off to the owner’s friend in the business and include the Carolinas’ only Ferrari retail stores.

Read More →
inside of car, person with hands on black steering wheel
Industryby Lauren LawrenceJuly 2, 2026

Exposure Drives Interest in Chinese Cars

At a recent demonstration, consumers had the chance to ride in a Chinese-branded vehicle, a firsthand experience that improved their perceptions and purchase intent.

Read More →
Ad Loading...
Woman's hands holding an wallet empty of cash
Industryby Hannah MitchellJuly 1, 2026

Automotive Consumers Sink Further in Debt

Most financing metrics hit records in the second quarter as more buyers locked themselves into long terms and high monthly payments.

Read More →
Rob Mancuso sitting in a chair on stage
Industryby Hannah MitchellJuly 1, 2026

Agent Advocate

Rob Mancuso, who comes from a long line of auto dealers, values general agents’ place in the industry and makes a case for them taking an even bigger seat at the table.

Read More →
Photo of a touchscreen on a car's dashboard
Industryby Hannah MitchellJune 25, 2026

Driving Under Distraction

Though consumers gave higher marks to new vehicles in JD Power’s most recent initial-quality poll, high-tech interference worsened, pointing to craving for simplicity.

Read More →
Ad Loading...
split background green and blue. 2019 to 2025 with car going from starting location to end point. $37,310 and $48,402. Agent Entrepreneur logo
Industryby Lauren LawrenceJune 25, 2026

Affordable New Cars a Thing of the Past

More than one out of five new vehicles sell for more than $60,000, according to Edmunds. That's up 7% compared to prepandemic 2019.

Read More →
Photo of multiple new SUVs on a car dealership lot
Industryby Hannah MitchellJune 22, 2026

State Follows Federal Warning on Auto Ads

The Massachusetts attorney general cautioned the state’s automotive dealers to be upfront with the consuming public about their vehicle prices or risk punishment.

Read More →
Gas pumps.
Industryby Lauren LawrenceJune 15, 2026

Consumer Outlook on the Rise

Younger generations are feeling more positive about their financial futures and current affordability pressures than older generations, according to recent TransUnion data.

Read More →
Ad Loading...
Group photo of men outside storefront.
Industryby Hannah MitchellMay 28, 2026

Pennsylvania Dealership Under New Retailers

The sale of the Chrysler Dodge Jeep Ram store puts a family auto group on a leaner path as first-time dealers take the helm.

Read More →
Ad Loading...