The Compensation of Our CEOs
Dec 4th, 2008 by Alex
The media has been reporting that all three CEOs of the top three U.S. car manufacturers offered to take $1 annual salaries. In light of the latest absurdity with regard to bailing out yet another industry at the expense of U.S. taxpayers, my thoughts on this are simple.
Big deal.
Alan Mulally is the CEO of Ford Motor Company. His annual salary is $6,006,150. His total compensation this fiscal year is $21,670,700.
G. Richard Wagoner is the CEO of General Motors. His annual salary is $1,558,330. His total compensation this fiscal year is $14,415,900.
Notice something?
That’s right, the majority of these CEOs compensation was not from their annual salary. They might notice the difference, but both of these guys could take no compensation next year and still earn almost $300,000 worth of interest on the past year’s income alone. That doesn’t even include whatever holdings they already have in their portfolio. Before taxes, that’s just over $11,500 in every bi-weekly paycheck.
The media reports that CEOs taking $1 salaries are a symbol to shareholders, showing that the CEO has got the company’s best interest in mind. What if they took no compensation at all? No stock options. No perks. I think that would be a much larger symbol. How better could a CEO show that they were in it solely for the company and not for the compensation, if there was no compensation at all?
Regardless of how this thing goes, I think it’d be a good start.
Good point! I hadn’t thought about the difference between salary and compensation, but it puts the hypocrisy into perspective, doesn’t it?
Thanks for a great post and thanks for raising awareness on how these manufacturers are still pulling the wool over everybody’s eyes, even when they have their hands out asking for taxpayer bailouts. It would be cheaper for the U.S. Government to take over the companies themselves than continue feeding cash into the coffers of these guys who use private jets like we use our family vehicle.
I posted articles on this on my website and made the comment that they don’t deserve to be bailed out, and there’s been hardly a comment. Do people just not care (apathetic), or not know (naive)? First the banking and finance sector, next the automotive sector, who comes next? What happened to personal responsibility? These guys stand up and admit “I failed - and badly” and then ask for cash!