The new chief financial officer at General Motors Co. will receive a salary of $750,000 next year, but he'll get up to another $5.45 million worth of stock starting in 2012 if GM successfully sells shares to the public.
Chris Liddell's pay package exceeds the limits imposed on companies that have received U.S. government aid, but an exemption was worked out with the government pay czar Kenneth Feinberg, GM said in a government filing Wednesday.
The Treasury Department confirmed the outlines of Liddell's pay package. It also announced that Feinberg had approved a compensation package for Michael Carpenter, the head of the joint financing arm for General Motors and Chrysler, that will pay a base salary of $950,000 and up to another $8.55 million worth of stock.
Liddell's compensation package will exceed what he got at Microsoft Corp. when accounting for his stock awards. His pay package at the software giant was about $2.4 million.
Liddell, 51, will leave his job as Microsoft's CFO on Dec. 31 and join GM next year. He is seen as a possible candidate for GM's next CEO.
GM's current CEO Ed Whitacre Jr. is not earning a salary, but he receives a $350,000 annual stipend as a board member. His predecessor Frederick "Fritz" Henderson, who was ousted earlier this month, was receiving a compensation package of nearly $5.5 million, including a cash salary of $950,000, under Feinberg's pay rules.
In addition to a base salary of $750,000, Liddell will receive $3.45 million in company stock over three years starting in 2012. He will get another stock grant of $2 million that vests in three years and is payable in 25 percent installments for every 25 percent repayment of GM's $6.7 billion in government loans.
GM has received $52 billion in taxpayer assistance, but most of that has been converted into equity that gives the U.S. government a 60 percent stake in the company. Last week, GM repaid $1 billion, its first payment to the government.
Under new pay rules for companies that received substantial government aid set in October, the base pay of General Motors' top executives is capped at $500,000. Much of the compensation for GM officials will be paid in company stock that cannot be redeemed until beginning in 2011 or after GM starts repaying its government loans.
However, a small number of exemptions to pay limits have been granted in the case of other major recipients of government money, including boosting the pay package of an American International Group Inc. employee to better align it with other executives at the insurer.
In the case of Carpenter, the new head of GMAC Financial Services, Feinberg ruled that in addition to the executive's $950,000 base salary, he is also eligible for up to $8.55 million in stock, payable in installments over several years and tied to the performance of GMAC.
GMAC has already received $12.5 billion in taxpayer money and is 35 percent owned by the federal government. Its survival is consider a crucial part of the Obama administration's restructuring of the auto industry.
The government has indicated it will provide an additional $6.5 billion to GMAC to boost the company's capital reserves and make sure it can provide the loans needed to support future sales of GM and Chrysler cars.
Carpenter, who had served on GMAC's board, was picked to succeed Alvaro de Molina who resigned as head of GMAC in November.
In a third ruling disclosed Wednesday, Feinberg said that Sergio Marchionne, the head of Italian automaker Fiat who was installed by the government in June to also run Chrysler, can receive a salary of $600,000 for his service as a director on Chrysler's board. Marchionne, who is being paid by Fiat, is not taking a salary for serving as head of Chrysler.
Fiat took control of Chrysler after it emerged from bankruptcy protection in June. Fiat owns 20 percent of Chrysler, with a chance for that to grow to 35 percent.