MENU
SEARCH
DETROIT - Now that General Motors appears to be ready to look outside the company for a chief executive, analysts say the job may not attract the top talent needed to steer it, according to a report by Reuters.
"Bringing in an outsider is often the best way to get a quick and decisive turnaround," said Renny Ponvert, head of Management CV, an executive research firm.
"That said, it is rarely pretty. It is almost always the most expensive solution in terms of the pay packages -- which is ironic since we know that GM's largest shareholder, the U.S. government, has said that no such pay packages are going to be awarded while we are the largest shareholder."
Base cash salaries are limited to $500,000 for more than 90 percent of GM's top 25 executives under new guidelines set by U.S. Treasury pay czar Kenneth Feinberg. Salaries above $500,000 must be paid in company stock that must be held long-term.
Plus, cash bonuses based on short-term performance are banned, and "golden parachute" severance payments are limited.
In comparison, Ford's top executive Alan Mulally's cash salary from Ford for this year is $1.4 million, although that is down 30 percent from last year. Most of his 2008 compensation of about $13.7 million was in company stock. Shares of Ford closed at $9.01 on Wednesday, up more than 500 percent from its 52-week low $1.50 reached on February 20.
Mulally continues to fly on private aircraft for personal and business travel, unlike his Detroit counterparts who have agreed to fly commercial as part of the government bailouts.
Also unlike his Detroit counterparts, he did not seek U.S. taxpayer money for a bailout.
GM's 68-year-old chairman, Ed Whitacre, acknowledged earlier this month the pay cap was a problem in finding outside talent, and he urged the Obama administration to allow more wiggle room for GM.
Whitacre, now acting CEO, is hunting for a new chief executive following the abrupt resignation of Fritz Henderson on Tuesday, the second chief executive to depart in eight months.
Henderson became CEO in March after Rick Wagoner was forced out by the Obama administration as part of the U.S. government-funded restructuring of GM.
Recent survey data shows that the overall demand for auto loans is down, but the demand for subprime loans is up as consumers face economic uncertainty and affordability pressures.
Read More →
The Mitsubishi location moves from one Texas automotive group to another, continuing this year’s spate of brisk buy-sell activity.
Read More →
As part of its 2030 business plan, Mitsubishi's North America arm will soon open its first 'gallery' store in Tennessee, where customers can learn about the brand, vehicles and technology.
Read More →
Just weeks before President Trump is set to meet with the Chinese president, two U.S. senators proposed a bill with the aim of protecting Americans’ data.
Read More →
A study of Q1 used-vehicle sales shows many consumers are looking to minimize fuel costs but aren’t willing to go all electric and no longer have a tax break incentive to do so.
Read More →
A recent study suggests expectant parents are feeling the burden of bad credit more than other demographics when it comes to buying a new car.
Read More →
Dealers should aim to build a positive work environment, helping employees execute an efficient experience, from their online research to the final delivery of the vehicle.
Read More →
A cloudy April forecast was expected due to last April’s sales surge in anticipation of U.S. trade tariff-inflated prices. Meanwhile, automakers pumped up incentives to address today’s consumer wallet woes.
Read More →
EREVs, also known as ‘series hybrids,’ may catch on in the U.S., where they currently have barely a toehold, as automakers tilt away from some purely electric models and consumers crave more range.
Read More →
A recent price spike due to several larger market forces, though it hasn’t dulled demand, is pushing more consumers to efficient models to squeeze in buys.
Read More →