The government auditors responsible for monitoring the Trouble Asset Relief Program (i.e. TARP) say executives at three companies received pay that was "excessive" given the guidelines outlined in the program, including employees of GM and Ally (formerly GMAC).
Of particular note, the report says numerous executives of General Motors received pay that was above the suggested $500,000 cash limit and 50th-percentile outlined in the program's guidelines. For instance, GM CEO Dan Akerson received $1.7 million in cash in 2012 with another $7.3 million in stock.
The highest paid CEO in the domestic car industry is Alan Mulally, who in 2011 received $29.5 million, of which $2 million was cash salary and the rest was bonus and stock.
Because GM still has stock owned by the Treasury they have to get executive pay approved by the Department which, in the words of the investigators, wasn't happening (you can read the full report here).
"In 2012, OSM did not follow its own guidelines aimed at curbing excessive pay
by having total compensation generally not exceed the 50th percentile for similarly
situated employees. Treasury awarded total pay packages exceeding the 50th percentile by more than $37 million for approximately 63% of the Top 25 employees of AIG, GM, and Ally."
To the credit of GM, Akerson's salary seems to be below the 50th percentile for a job (comparing to Ford and Chrysler) that's in the 90th percentile for being terrible and thankless. Ed Whitacre, when not self-congratulating, does make a reasonable point that hiring is nearly impossible when the pay is so low.
Still, people may not like the fact that GM was beating down Treasury Secretary Tim Geitner's door to get a raise for someone at GM's extremely troublesome European division, which is the source for their biggest loses.
Also from the report:
In particular, GM noted concerns with using restricted stock for several senior executives,including CEO Akerson, the chief financial officer, an executive of GM Europe, and others. GM noted in the proxy statement that it had discussed its concerns with the Acting Special Master.
In February 2012, GM proposed that nine employees receive cash salary increases, one of which was a cash salary increase from $600,000 to $900,000 for a GM Europe employee, despite that unit's losses.
They appear to be talking about Steve Girsky.
Treasury officials say the report is full of errors and said it did what had to be done to keep these companies competitive so the taxpayers can get more of their money back.
Whether right or wrong, it's surely to make GM want to buy its remaining government-held shares back so they can run their own business.
Photo Credit: Getty