General Motors Co. will boost total pay for Chief Executive Officer Fritz Henderson to $5.45 million, a fourfold increase, under guidelines for recipients of U.S. bailout funds, a person familiar with the plan said.
Henderson's $1.26 million cash salary will be cut 25 percent to $950,000, said the person, who asked not to be identified because the terms aren't public. He also will get $4.24 million of stock and restricted stock, the Treasury's special master for executive pay said in a letter to GM.
"Most people wouldn't consider it a raise," said Julie Gibson, a GM spokeswoman. "They brought the salary down some and increased the reliance on long-term stock."
The rules are part of the Obama administration's effort to curb cash pay and match compensation to performance at GM, Chrysler Group LLC and five financial companies that got aid from the Troubled Asset Relief Program. Henderson, 50, led GM through a bankruptcy backed by $50 billion from taxpayers.
Repaying that aid would require Henderson to end $88 billion in losses since 2004 and reverse what former U.S. auto adviser Steven Rattner called "stunningly poor management." Rattner wrote on Fortune magazine's Web site that former CEO Rick Wagoner "set a tone of friendly arrogance" before being replaced by Henderson in March.
"I wouldn't call General Motors out of the woods," said Erich Merkle, president of consultant Autoconomy.com in Grand Rapids, Michigan. "GM still faces a number of challenges. There's no guarantee what the stock will be worth."
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