GM: Automaker's Recovery Hindered By Executive Salary Limits
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 suggested relaxing the pay limits, and said he was meeting later in the day with federal officials who oversee executive compensation 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 that in their best interest, there should be some relaxing."
Akerson said he recently informed executives there would be no salary increases in 2011 for about 26,000 white-collar workers. In a message to employees obtained by The Associated Press, the company said there would not be "any broad-based salaried merit plans in the U.S. or Canada." GM said the decision was based on "controlling structural costs in all aspects of our business."
Akerson is receiving a government-approved $9 million in annual compensation, including stock and salary.
Akerson declined to comment when asked by reporters what he hoped to accomplish in the meeting with Pat Geoghegan, the government's top official on executive pay.
Treasury spokesman Mark Paustenbach said Geoghegan "routinely meets with executives on these matters."
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.