Monday, March 30, 2009
GM "On the Fritz"
GM's CEO Rick Wagoner is stepping down, to be replaced by GM's president and chief operating officer, Fritz Henderson.
Thus GM is officially On the Fritz!
bnet reports: "According to the company’s recent proxy statement:
“There is no general severance plan for executives. At the discretion of the Executive Compensation Committee, Named Executive Officers could receive severance pay up to 2.99 times base salary and annual bonus target. Other salaried employees may receive up to 12 months salary upon involuntary separation.”
The annual target cash compensation for Wagoner is $5.0 million per annum, which includes a base salary of $2.2 million. So the board could offer Wagoner up to $15 million in severance pay.
Wagoner’s stock-based performance incentives, worth approximately $10 million at December 31, 2007 (common stock at $24.89), can now be cashed in for about $2.6 million. In addition, some 2.9 million incentive options awarded to Wagoner in the last decade at exercise prices between $20.90 a share to $75.50 a share are now worthless.
Upon separation from the company, Wagoner, 55, would be eligible to receive an annual annuity payment of $61,200 from his supplemental retirement plan. He will, however, have to wait until the age of 60 to tap his executive retirement plan, worth an estimated $19.7 million at December 31, 2007. In addition, Wagoner had a 2007 year-end non-qualified deferred compensation account worth an estimated $765,000."
So we needn't worry about Wagoner-- he will exit with a golden parachute.
Meanwhile since the first round of bailout money, GM's sales are down 45%. Apparently people are not comfortable buying a big ticket item (a new car) from a company on the edge of bankruptcy. That and the fact much of GM's fleet are gas guzzlers.
Yes indeed, even with lucrative Military contracts for the HUmmers during a time of not one, but 2 wars, GM is struggling.
The thing that bothers me most about GM, is the fact they sacrificed the EV1 electric car, probably to keep their cherished relationship with big oil. Now big oil has the biggest profits in history, while the automaker teeters on the abyss of bankruptcy & failure.
The honeymoon is over!
GM needs to "save itself" and get ahead of the curve with electric vehicles.
Don;t tell us how the Volt will be ready in several years at a sky high price.
Pull out the engineering designs of the cars made in the early 90's..... and roll production.
As for Wagoner- he will have a safe & soft landing- much more so than the company he helped run into the ground.