DETROIT -- General Motors Corp. -- contrary to suggestions by Kirk Kerkorian aide Jerry York -- is moving as swiftly as it can to turn around its ailing auto business and does not need to slash executive salaries or ax brands, a top GM executive said Wednesday.
"I have to say I gave at the office," GM Vice Chairman and product chief Bob Lutz said, referring to what he estimates is a 60 percent drop in his salary after company losses forced him to forgo a bonus and rendered his stock options worthless.
Lutz asserted that cutting executive pay could trigger a talent drain at a time when the automaker needs to marshal all of its resources.
"Here's where people get this wrong: They say, 'Why are executives paid so much? You have to ask: Why are professional athletes paid so much?' "
"The capability of successfully trying to turn around an unsuccessful automobile company is a very rare and highly sought after skill set. And you do the shareholder no good whatsoever by reducing compensation to the point where everybody leaves."
Lutz spoke to The Detroit News while on a tour of the North American International Auto Show on Wednesday with GM's board of directors, including GM Chairman and CEO Rick Wagoner.
York, an adviser to GM shareholder Kerkorian, called on GM on Tuesday to speed its turnaround by cutting executive and director pay, killing the Hummer and Saab brands, reducing its quarterly dividend and expanding other cost cuts.
"We're always happy to listen to suggestions, but we think we have the right plan to turn it around," Lutz said.
GM has frozen the salaries of top executives the last two years and bonuses have been cut to reflect the automaker's falling profits.
In 2004, Wagoner's compensation package included a $2.2 million salary -- the same as 2003 -- a $2.5 million bonus and 400,000 stock options valued at the time at $5.1 million. In 2003, he received a $2.9 million bonus and 500,000 stock options.
Lutz and John Devine, GM's former chief financial officer, received cash compensation totaling $4.4 million and $4.2 million, respectively, for 2004. In 2003, they each received about $6.4 million. The cash compensation included base salaries of $1.55 million each in 2003 and 2004, plus bonuses. York also called for GM to lower the pay of its outside directors, which receive $200,000 a year, with $140,000 deferred in restricted common stock units.
The automaker is planning job cuts and plant closings to reverse North American losses that reached $4.8 billion in the first nine months of 2005.http://www.detnews.com/apps/pbcs.dll/article?AID=/20060112/AUTO01/601120365
"I have to say I gave at the office," GM Vice Chairman and product chief Bob Lutz said, referring to what he estimates is a 60 percent drop in his salary after company losses forced him to forgo a bonus and rendered his stock options worthless.
Lutz asserted that cutting executive pay could trigger a talent drain at a time when the automaker needs to marshal all of its resources.
"Here's where people get this wrong: They say, 'Why are executives paid so much? You have to ask: Why are professional athletes paid so much?' "
"The capability of successfully trying to turn around an unsuccessful automobile company is a very rare and highly sought after skill set. And you do the shareholder no good whatsoever by reducing compensation to the point where everybody leaves."
Lutz spoke to The Detroit News while on a tour of the North American International Auto Show on Wednesday with GM's board of directors, including GM Chairman and CEO Rick Wagoner.
York, an adviser to GM shareholder Kerkorian, called on GM on Tuesday to speed its turnaround by cutting executive and director pay, killing the Hummer and Saab brands, reducing its quarterly dividend and expanding other cost cuts.
"We're always happy to listen to suggestions, but we think we have the right plan to turn it around," Lutz said.
GM has frozen the salaries of top executives the last two years and bonuses have been cut to reflect the automaker's falling profits.
In 2004, Wagoner's compensation package included a $2.2 million salary -- the same as 2003 -- a $2.5 million bonus and 400,000 stock options valued at the time at $5.1 million. In 2003, he received a $2.9 million bonus and 500,000 stock options.
Lutz and John Devine, GM's former chief financial officer, received cash compensation totaling $4.4 million and $4.2 million, respectively, for 2004. In 2003, they each received about $6.4 million. The cash compensation included base salaries of $1.55 million each in 2003 and 2004, plus bonuses. York also called for GM to lower the pay of its outside directors, which receive $200,000 a year, with $140,000 deferred in restricted common stock units.
The automaker is planning job cuts and plant closings to reverse North American losses that reached $4.8 billion in the first nine months of 2005.http://www.detnews.com/apps/pbcs.dll/article?AID=/20060112/AUTO01/601120365