GM's former CEO has to make do with $8 million retirement
Wagoner, who was in charge of the company in its last decade -- he became CEO in 2000 and chairman in 2003 -- led GM to $85 billion in losses. So now, after the White House asked him to resign on March 30, he will retire with the following package: $1.636 million in benefits annually for each of the next five years, plus an annual pension of $74,030 for the rest of his life. Wagoner can also choose to cash out the company-provided life insurance policy worth about $2.6 million, bringing the package worth to about $10.8 million.
While this is still quite a lot, it is less than half of what his package would have been a year ago when his benefits were worth $22.1 million. But that was before GM went through a federally financed bankruptcy, received $50 billion in U.S. government loan and was renamed Motors Liquidation Company.
Wagoner's reduced package is certainly far less than what other retiring CEOs of large companies tend to get. Examples include Lee Raymond's near $400 million retirement package in 2006 at ExxonMobil (XOM) and Stan O'Neal's package of $161.5 million in stock, options and retirement benefits at Merrill Lynch.
Some may find Wagoner's current package acceptable. When considering his 32 years of employment at GM, his regular salary during that time and the revenue the company is generating, $10 million actually may not sound all that excessive.
No doubt, though, that stock holders and other GM retirees whose seen their own benefits slashed don't see it that way. In addition, the retirees' benefits that are left still remain at risk.
And isn't there a reason why executives are paid the big bucks? Aren't they supposed to run the company, and run it well, not run it into the ground? But during his time as CEO, Wagoner cut thousands of jobs and the share price dropped from $92 to basically zero. When considering that during his career at GM through 2008 he received compensation totaling about $63.3 million, with $38.7 million of that coming while he was CEO, it's hard to argue that he deserves a retirement package that's different than that of any other of the thousands of employees forced into retirement.