After General Motors said that it couldn’t release the full details of its new CEO Mary Barra’s compensation package until a proxy statement in April, the company reversed course on Monday and made more information public.
Questions has been raised by ThinkProgress and other outlets about a pay package for General Motor’s (GM) first female CEO, as well as in a statement from Reps. Rosa DeLauro (D-CT) and Louise Slaughter (D-NY). Her base salary, $1.6 million compared to her male predecessor Dan Akerson’s $1.7 million, and short-term compensation, $2.8 million compared to his $7.3 million, were already known. That means that this year, Barra will receive less than half of what Akerson did in his final year and less than what he will make in retirement as he continues to serve as a senior adviser.
But the long-term portion wasn’t going to be disclosed until the company’s proxy filing in April. In the midst of criticism, as the release noted, “The company released the full figures ahead of its proxy filing in April to correct misperceptions created by comparisons that used only a portion of Barra’s overall compensation.” Her long-term compensation portion is $10 million.
The company says her total package is a 60 percent increase over Akerson’s. But given that long-term compensation is usually stock awards that are tied to company performance, the actual value of the award can’t yet be known. In the release, Chairman Tim Solso himself noted, “The company’s performance will ultimately determine how much she is paid.” This portion is also subject to shareholder approval at the company’s annual meeting in June.
And no details were released about when she would receive the additional money. The company didn’t respond to a request for further information. Long-term compensation usually doesn’t pay out right away, coming as early as two years or as late as ten years down the road. This is typical in an effort to align shareholders’ interests with the executive’s. Barra will receieve some long-term compensation this year as part of her previous pay package, a spokesperson told ThinkProgress, but couldn’t disclose the figure.
This hasn’t been the case with some past GM CEOs. As Elizabeth MacDonald wrote in a follow up, Ackerson was awarded an immediate $2 million in long-term stock when he was hired in 2010, and his total pay package that year was $9.57 million on an annualized basis, far more than what we know Barra will make this year. His predecessor, Ed Whitacre, was paid $9 million for working nine months in 2010, including an immedidate $2 million in long-term compensation. At least four other chief executives at the company were similarly given large long-term pay packages ahead of shareholder meetings. This practice is also common at companies like Archer Daniels Midland, IBM, and Lockheed Martin.
There is also still the question of why her base salary is below Akerson’s, given that Barra has logged 33 years at the company and he had zero experience in the industry when he joined. The company has pointed to the fact that he served as both CEO and chairman — the dual roles have now been split between Barra and Solso — and that he had prior experience as a chief executive at technology firms. This follows a pattern that dogs many women: they are paid on past performance, while men are paid on future potential.