GM's Executives Don't Reach Top Bonuses

The Detroit Free Press in a copywritten story reported that the “General Motors Corp. board of directors drastically slashed annual bonuses for its five highest-paid executives, sending a message that poor company performance will not be handsomely rewarded. Chairman Jack Smith's bonus was sliced by more than 75 percent -- from $4.8 million in 1999 to $1.1 million. He received $14 million total compensation for 2000 which was 23 percent lower than the $18.2 million he was paid in 1999.”

They went on to report that “President and Chief Executive Officer Richard Wagoner's bonus was cut by 70 percent -- to $784,000 from $2.6 million in 1999 after the executives were unable to parlay a year of record sales into higher profits. The world's largest automaker saw profits drop 20 percent from $5.6 billion in 1999 to $4.5 billion in 2000 in spite of $184.5 billion in sales, a nearly 5-percent increase from 1999. Wagoner's total compensation for 2000 was $4 million, nearly 59 percent lower than the $9.7 million he received in 1999. The compensation was detailed in the GM's proxy report filed Thursday with the Securities and Exchange Commission. The company's compensation committee noted in the proxy that GM failed to reach its "financial, market share and quality targets established for annual incentive awards."

The report continued, saying that “while company performance was strong enough to trigger bonus payments, it was not high enough to qualify executives for the maximum amount. GM officials would not disclose the maximum bonuses its executives could receive.”