General Motors made a remarkable comeback in 2010. But its new CEO took the job too late in the year to profit as much as other top executives.
GM gave Chief Executive and Chairman Dan Akerson a 2010 pay package valued at just over $2.5 million. The compensation was announced in a regulatory filing on Thursday.
The amount was far less than his predecessor and other executives at the company. But Akerson only worked the final four months of the year, and the government limits what GM can pay executives because it took bailout money in 2009.
Still, Akerson assumed the job as GM was finishing up an impressive year with a flurry of successes. GM turned its first annual profit in years, returned as a publicly traded company, and increased U.S. sales of cars and trucks.
That success proved more profitable for Akerson's predecessor, Ed Whitacre, 69, who received compensation valued at $5 million last year. Whitacre was CEO for just eight months in 2010, leaving Sept. 1. The company's board had decided it wanted a leader who would stay on longer than Whitacre was willing.
Akerson, 62, had joined GM as a board member in 2009. He took over the CEO job from Whitacre and added the chairman's title at the start of this year. For his work in 2010, he received a salary of $566,667, stock awards valued at $1.77 million and other compensation of $194,088.
Former Vice Chairman and Chief Financial Officer Chris Liddell was GM's highest-paid executive last year with a package worth $6.2 million. He left the company April 1 after being passed over when Akerson replaced Whitacre.
For the full year of 2011, Akerson's pay package will be larger. GM has said that he will get salary and stock worth $9 million annually.
Still, that's dwarfed by the $26.5 million received by Alan Mulally, CEO of Ford Motor Co., which did not take government bailout money and isn't restricted in what it can pay executives.
The U.S. government has restricted the amount of cash GM can pay its top 25 executives because the company still hasn't fully repaid its bailout. The government has said cash payouts can't be increased this year, but the companies are being allowed to boost deferred stock awards to their executives.
GM pulled off a remarkable turnaround in 2010 after emerging from bankruptcy protection the year before. It went from losing more than $80 billion in the five years before its bankruptcy and needing a government bailout to earning $4.7 billion in 2010. It also became a publically traded stock again in November and increased U.S. sales by 7.2 percent last year.
Whitacre is credited with firing ineffective managers and speeding up decisions at the company.
Akerson is pushing to have GM's cars, such as the Chevrolet Malibu sedan, overhauled faster to keep them fresh and appealing to buyers.
Akerson's other compensation for 2010 included $153,000 in pay for serving a full year on the board, as well as $13,000 in relocation expenses, $6,740 for security and just over $10,000 for company vehicles.
Much of the GM's turnaround stems from the company's ability to shed massive debts in bankruptcy, and the $50 billion rescue package the U.S. government gave the Detroit automaker, which was bleeding cash and headed toward collapse in early 2009.
The Associated Press formula calculates an executive's total compensation during the last fiscal year by adding salary, bonuses, perks, above-market interest the company pays on deferred compensation and the estimated value of stock and stock options awarded during the year. The AP formula does not count changes in the present value of pension benefits. That makes the AP total slightly different in most cases from the total reported by companies to the Securities and Exchange Commission.
The value that a company assigned to an executive's stock and option awards for 2010 was the present value of what the company expected the awards to be worth to the executive over time. Companies use one of several formulas to calculate that value. However, the number is just an estimate, and what an executive ultimately receives will depend on the performance of the company's stock in the years after the awards are granted. Most stock compensation programs require an executive to wait a specified amount of time to receive shares or exercise options.