Top GM Exec Says Federal Pay Limits Hurt Company

WASHINGTON (AP) – The top executive at General Motors said Friday that the automaker’s attempt to rebound from its bankruptcy is being hindered by salary limits the government has clamped on executives at companies that accepted federal bailouts.

GM CEO Dan Akerson said in a speech to the Economic Club of Washington, D.C., that the company faces many challenges, including the retention of top talent in its executive ranks. He said he was meeting later in the day with federal officials who oversee executive pay for companies that received bailouts.

“We have to be competitive. We have to be able to attract and retain great people,” Akerson said, adding, “We’ve been able to retain them but we’re starting to lose them and I think that’s an issue for our owners to recognize.”

The government gave General Motors $49.5 billion to bail out the automaker in 2008 and 2009. Treasury earned $13.5 billion from GM’s initial public offering in November. U.S. taxpayers still own 33 percent of the company.

In a criticism of a rival automaker unusual for corporate leaders, Akerson took a shot at Toyota’s popular hybrid car, the Prius. GM is pinning some of its plans for a comeback on its new plug-in electric car, the Chevrolet Volt, that would compete with the Prius.

“We commonly refer to the geek-mobile as the Prius. And I wouldn’t be caught dead in a Prius,” he said. Speaking of the Volt, he added, “This actually looks good.”

Akerson also said GM was well-positioned to take advantage of growth markets in China and India.

He said GM learned a lesson in humility from its bankruptcy but it was well-positioned to return to sustained profitability while reducing its debt and large pension obligations.

“We survived a near-death experience and we deeply appreciate the support we got from the American people,” Akerson said.

One of the most successful GM assembly plants is located in Arlington. The Arlington location is the only GM plant building SUVs for the company.

(© Copyright 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

  • Kris

    Shoot hire me. Pay me $150,000.00 annually. Pay me $100,000.00 a year. Take the remainding $50,000.00 and share it amongst employee working for the company. Trust me its not a loss. I’ve been a Customer Service Rep, A night stocker, IT Help Desk Technician, A Network Systems Operator, Mortgage Origination Analyst, Graphics Artist, Retail Sales, Office Management, Accounts Receivable, Accounts Payable and Inventory Specialist. All at the same time have taken many college courses and have lived many different lifestyles. I have friends of all ages, all races and all kinds. Connecting to people is easy for me to do and anything you throw at me I will always figure it out. If not I have many mentors and people at my disposal.

    • Fred

      Well, if you can do the job then apply stupid! Put up or shut up, they said they were looking to get great people.

  • David

    It’s just a crying, stinking shame these poor, hapless GM execs think they’re being unfairly treated with their salary caps. As a part-owner (I’m a taxpayer), until GM repays its taxpayer loan, TOO BAD. Live within your means. That’s what WE have to do.

    • Sick and Tired

      I agree with you David. I am sick and tired of the exec whining and acting as if they won’t be able to survive. The answer as you stated is to live within your means. The rest of us are suffering, whe do they get to keep on keeping on with their lifestyles and I have to change mine. NO MORE WHINING!

  • Elmer

    Don’t forget that GM won’t have to pay $45.4 billion in taxes on future profits thanks to the carry forward of losses from old GM. Also, Dan Akerson, will receive a $1.7 million cash salary as well as stock grants.
    Akerson, who succeeded Ed Whitacre as CEO on September 1, will receive $5.3 million of stock per year to be parceled out over three years starting next September, and $2 million of restricted stock in addition to the cash salary.


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