GM CEO Mary Barra has only been on the job about a month, but she's had a good run so far. She sat next to Michelle Obama at the State of the Union address and was even named the most powerful woman in business by Fortune magazine today. Does that make her feel better about getting paid less than her male predecessor?
The Detroit Press reports that Fortune placed GM's former product development chief at the top of the list of their 50 most powerful women in business. IBM CEO Ginni Rommetty came in at number two, and PepsiCo CEO Indra Nooyi placed third.
As the newspaper notes, Barra so far has downplayed the historical significance of her appointment as GM's first female CEO and the only woman to run a major automaker. In the magazine story, billionaire and GM investor Warren Buffett had high praise for Barra's potential:
"I hope that Mary Barra turns out to be the Alfred Sloan of the 21st century," Buffett said, referring to the legendary GM CEO from the mid-20th Century. "From what I've seen, she's got the goods."
Those "goods" apparently don't mean Barra deserves to get paid as much as the man she replaced, former GM CEO Dan Akerson. CBS News reports that according to a regulatory filing, Barra will be paid $4.4 million in salary and other compensation, while Akerson made $9.1 million in 2012 which included salary and stock awards. When Akerson started as CEO in 2010 he earned $2.5 million, but at the time government-owned GM was subject to executive pay caps. (Akerson continues to make $4.86 million annually as a "senior adviser" to GM.)
In a statement, GM told critics, well, don't worry about it.
(The $4.4 million) represents two of her three compensation components. Specific long-term incentive compensation numbers will be included in the company's April 2014 proxy filing, which likely will dispel any notion of pay inequity. Stockholders at GM's Annual Meeting must approve the long-term portion of her pay... The discussion of pay inequality between Barra and her predecessor is premature and flawed.
Granted, $4.4 million is nothing to sneeze at, but it's hard to justify exactly why Barra makes so much less than Akerson, and it's clear from that statement that GM is struggling to do so.
Barra can take some consolation in knowing she's not alone. The gender pay gap is widespread, well documented and indisputable. A study by the Center For American Progress last year said that women still earn less than men in nearly every profession, and some occupations have greater disparities than others. Female chief executives earn only 69 percent as much as their male counterparts.
And with women now making up nearly 50 percent of the American workforce and fully 51.5 percent of management, this kind of pay inequality is getting increasingly hard to defend in 2014. It would be laughable if it wasn't so sad.
Remember, ladies: You can be as good or better a CEO as any man, but you're apparently still not good enough to get paid as much as one. General Motors says so.
Update: Actually, Barra will make a lot more than Akerson did.
Photo credit AP