General Motors found itself at the center of a small storm this morning when it was suggested that CEO Dan Akerson’s pay package would grow for 2013. It’s a tiff that otherwise overshadowed GM’s other major move, installing a new Chief Marketing Officer who previously worked for Volkswagen.
The Detroit News reported yesterday that General Motors was planning to up CEO Dan Akerson’s compensation from $9 million to $11.1 million, an increase of more than 20 percent. The source: documents filed by GM (still partially owned by the federal government) ahead of a congressional hearing on executive pay.
General Motors fired back in a curt press release this morning, claiming that the reports are “false” and that the story was a result of “someone who obviously did not understand the compensation [leaking] the information that misrepresented the truth.” Detroit News writer David Shepardson doubled down this morning, saying that the documents still show the bottom line as $11.1 million, but it’s a result of restricted stock options becoming unrestricted. In essence, Akerson’s pay increases because stock given to him in 2011 can now be cashed in, although his $1.7 million cash base pay remains the same. That $1.7 million cash figure, it should be said, was approved for 2012 by the Troubled Asset Relief Program administrators (a condition of the 2009 automotive bailout). GM still maintains that the number—as it pertains to TARP—is $9 million.
For the record, Akerson is paid much, much less than his counterparts in Auburn Hills and Dearborn, a direct result of GM’s government ownership. Fiat/Chrysler head Sergio Marchionne made $22.2 million last year, while Ford (which took no TARP funds and didn’t file for bankruptcy) paid CEO Alan Mulally $29.5 million.
Forgetting about the executive pay mess for a second, GM did score a “big get” in hiring Tim Mahoney to be its new Chief Marketing Officer. Mahoney was previously the Chief Product and Marketing Officer at Volkswagen for the last two years, and before that worked for Subaru and Porsche. It’s worth mentioning that all three brands are known for their great on-point marketing, which should reflect well on Mahoney.
Mahoney is now tasked with coordinating General Motors' global marketing efforts, including working with Commonwealth, a joint-venture between advertising superstars Goodby, Silverstein & Partners and McCann Erickson Worldwide. Commonwealth was selected in early 2012 to service GM’s advertising and marketing around the world. He’s also tasked with working on Chevrolet's major new campaign, Find New Roads.