By John D. Stoll
General Motors Co. Chief Executive Mary Barra earned $16.2
million in a choppy first year at the helm, a pay package that far
outpaces her predecessor's compensation and exceeds the initial
target set by the board when she took the job.
The Detroit auto maker's 2014 executive compensation plans,
outlined in an annual proxy report filed Friday with the Securities
and Exchange Commission, represent a shifting compensation
strategy. No longer restricted by Treasury Department pay
guidelines, GM now has liberty to use the promise of bigger paydays
to reward, retain and motivate top managers.
Ms. Barra, 53, earned 80% more than the $9 million package paid
to former CEO Dan Akerson in 2013, even though her $1.6 million
base salary is slightly lower than the $1.7 million base Mr.
Akerson was paid.
Since taking over in January 2014, she has been managing an
ignition-switch safety crisis that overshadowed her initial months
in office. Ford Motor Co.'s Mark Fields earned an $18.6 million
package for last year's performance, including a half-year as CEO
during which he was forced to lower certain near-term financial
targets.
Vehicle recall costs of $2.8 billion hurt Ms. Barra's overall
compensation, and the packages earned by other top executives.
Without those costs, GM would have achieved its goals for core
business operations, the company said.
GM initially set Ms. Barra's compensation target at $14.4
million. Pension changes, executive perks (such as private air
travel or financial counseling) and the value of previously
promised restricted stock are factors that led to the 12.5% extra
in compensation.
While her appointment as Detroit's first female auto chief was
celebrated, Ms. Barra had no time to do a victory lap. The
company's safety problems came to light in early 2014 and were
emblematic of an operating culture that shirked responsibility and
didn't take decisive action, even after GM's 2009 bankruptcy.
GM was bailed out by the Troubled Asset Relief Program in 2009,
and has for several years been restricted by compensation rules.
The government's sale of its equity ended an era of TARP
oversight.
In response the ignition-switch crisis, Ms. Barra, a career-long
GM employee, fired 15 employees and launched an overhaul of the
company's culture. The auto maker was subject to several
congressional hearings, and actions dating back to early last
decade remain under investigation by the Justice Department.
In October, Ms. Barra unveiled ambitious financial targets and
margin goals designed to guide the company beyond 2020. The auto
maker earned $2.8 billion in net income last year, less than 2013
due to the costs of vehicle recalls.
In addition to her base salary, Ms. Barra earned a $2 million
nonequity award, which was paid out at 74% to reflect company
performance on earnings, market share and quality. The board didn't
adjust these awards to reflect personal achievements.
She also earned $11.8 million in stock awards, $350,000 related
to pension compensation and $412,532 in miscellaneous income.
GM's share price has waned since Ms. Barra's appointment.
Trading at $40.68 at the beginning of 2014, the stock ended the
year at $34.91. It exchanged hands at $35.63 Friday, one day after
the company's first-quarter earnings report missed Wall Street
expectations.
Ms. Barra earlier in 2015 faced off with former hedge-fund
manager Harry Wilson and a group of investment firms. Initially
demanding an $8 billion share buyback and representation on the
board, Mr. Wilson's group later settled for a $5 billion commitment
and agreed to abandon the pursuit of director slots.
GM's General Counsel Mike Millikin retired in 2014, but not
before coming under intense congressional scrutiny for his role in
the company's handling of the ignition-switch problems. He earned
$5.8 million in 2014, and was awarded a special retention award
last March--at which point GM was subject to intense
scrutiny--valued at $2 million.
The ignition-switch problem has been tied to 87 deaths. While
criticized for being in the dark about several years of legal
settlements and internal studies related to the problem, Mr.
Millikin has been lauded by Ms. Barra as a trusted lieutenant who
took immediate steps to help GM dig out of the crisis.
Mark Reuss, GM's product chief, and newly hired GM Europe boss
Karl-Thomas Neumann were also paid retention bonuses in 2014. Mr.
Reuss, long part of GM's management team, earned $9.5 million in
total compensation.
Dan Ammann, a former Morgan Stanley investment banker, was
promoted to GM president in 2014 and earned $8.5 million.
GM also said Novartis AG CEO Joseph Jimenez will join the board
of directors. Neville Isdell, a former Coca-Cola Co. CEO, on the
board since before GM's bankruptcy, will retire. The moves are the
latest in a series of changes to the auto maker's board.
Write to John D. Stoll at john.stoll@wsj.com
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