General Motors may be limited as to how much cash it can pay its executives, but the automaker does plan on rewarding them with some sizable stock options. The Detroit automaker outlined its plans for executive stock options with the U.S. Securities and Exchange Commission yesterday, suggesting an initial public offering of stock may be in the pipeline.
Following its $50-billion bailout last year, GM is severely limited by the U.S. Treasury as to what it can pay its top talent. The company isn't, however, limited in what it can give employees in stock. Although the company has yet to issue new stock and is still a private company, a recent filing with the SEC estimates each share could be worth a whopping $53.98 each.
In addition to their regular salary, GM's top 12 executives will receive stock options. Salary stock is guaranteed in equal payments over three years, while restricted stock is directly tied to the company's performance, and may only be cashed in once specific performance goals are met. Collectively, the directors will receive an estimated $13 million in stock-based payouts.
Unsurprisingly, CEO Ed Whitacre will be given the most sizable chunk of stock. Although he'll receive *** million in cash salary this year, Reuters says his stock payout could be worth nearly $7.3 million. Whitacre won't be able to cash in on any portion of his salary stock until March 2011.
The filing of the stock option payment plan is largely seen as GM moving even closer to launching its IPO. Although the automaker has flirted with several different timetables for returning to public ownership, the company could launch the IPO as early as the end of 2010. Once it does, the U.S. government -- which still owns 61 percent of GM -- can begin to sell its remaining portion of the company.