General Motors is proposing an $11.1 million compensation package for CEO and Chairman Dan Akerson this year, $2 million more than it paid him in 2012, according to documents obtained Monday by the Free Press.
The documents came to light the day before a U.S. House Oversight and Government Reform Committee hearing looking into whether the U.S. Treasury has allowed excessive pay for executives at companies aided by the Troubled Asset Relief Program. GM received $49.5 billion in aid to keep it afloat in 2008 and 2009.
The government must approve executive pay at GM and Detroit-based Ally Financial as a condition of their bailouts, meaning Akerson's pay package might be denied or reduced.
In 2012, the Treasury Department capped Akerson's compensation at $9 million, the same as 2011. His compensation included $1.7 million in cash salary and stock valued at $7.3 million.
By comparison, Ford paid CEO Alan Mulally $29.5 million in 2011, while Sergio Marchionne, who heads Chrysler, Fiat and Fiat Industrial, received a combined $22.2 million from Fiat and Fiat Industrial.
Last month, an inspector general investigating the government rescue program deemed the executive pay packages as "excessive." That inspector general, Christy Romero, and Patricia Geoghegan, the special master for TARP executive compensation, are expected to testify at Tuesday's hearing in Washington.
The Treasury Department has said it wants to strike a balance between allowing the companies to stay competitive in the marketplace and ensuring taxpayers aren't funding outrageous salaries.
The documents obtained by the Free Press didn't include names but a list of the 25 highest-paid executives next to proposed total compensation for this year. Aside from Akerson, total compensation ranged from $6 million for the second highest-paid executive on the list down to $1.8 million for the 25th highest-paid.
According to the inspector general's report, three GM executives had approved pay of more than $5 million in 2012. For 2013, GM wants to give raises to its top three highest-paid executives, according to the new document.
"As a general matter, the Office of Special Master does not comment on individual company proposals," a Treasury Department official told the Free Press. "But I would note that just because a company makes a particular proposal does not mean it will ultimately be approved."
GM declined to comment on the document, which had been provided to the committee in advance Tuesday's hearing. But spokesman Tom Henderson confirmed that GM had delivered an executive compensation proposal to the Treasury Department.
The Treasury official confirmed that the government plans to maintain its right to sign off on GM pay increases until it has sold its final shares.
GM executives have said the government's pay restrictions hinder the company's ability to recruit top talent.
Akerson was making substantially more as a private equity executive before agreeing to become CEO of GM in September 2010.
"He made it pretty clear he was giving up a large amount of money to do a public service to help an American company get back on its," Morningstar analyst David Whiston said. "I'm sure he thinks he's underpaid and the board probably agrees with him."
The document obtained by the Free Press also shows that Ally Financial wants to pay CEO Michael Carpenter $9.6 million in 2013 -- about the same as the $9.5 million listed for the position in the inspector general's report on 2012 pay. Ally had four executives making more than $5 million in 2012; the new list also has four.
In her report last month, Romero said even though Geoghegan's office had set guidelines aimed at curbing excessive pay, "Treasury made no meaningful reform."
Geoghegan disagreed with the report, saying Treasury balanced pay with both the taxpayers' investment and the need to keep the companies competitive so they could pay back the investment.
But until recently, government owned a large stake in GM, though that has been reduced significantly.
The government in December agreed to sell the rest of its GM shares within 12 to 15 months. GM bought back 200 million shares for $5.5 billion, and the government in January launched a plan to start selling the rest of its GM stock on the open market throughout the year. The government owned about 19% of GM after the buyback deal.
If the government sold all of its GM stock at today's price, it would lose more than $12 billion on the bailout.
Treasury has recouped about $6 billion of the $16 billion invested in Ally, the former GMAC, according to reports submitted to Congress this month. The government still owns about 74% of Ally.
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