PAYDAY: GM's Rick Wagoner Drives Away with $20M Retirement

[babylonsister]

PAYDAY: GM's Rick Wagoner Drives Away with $20M Retirement

Critic Calls Multi-Million Package "Perfect Example" of Frustration with Industry
By MICHELLE LEDER and JUSTIN ROOD
March 30, 2009


Rick Wagoner will leave his post as CEO of bailed-out General Motors with a $20 million retirement package, the company's financial filings show.

Although the Treasury Department has barred GM from paying severance to Wagoner or any other senior executive, Wagoner is eligible to collect millions in retirement benefits from his former employer, according to the documents reviewed by ABC News.

The Obama administration asked for Wagoner to resign Sunday, as part of its restructuring of the auto industry. President Obama said this morning that forcing Wagoner out indicated it was a time for new leadership.

Under Wagoner's leadership, GM lost tens of billions of dollars, took billions in taxpayer-financed aid, and cut tens of thousands of jobs, including announced plans to cut 47,000 employees by the end of 2009.

Wagoner's Private Jet Trip to Washington

Wagoner was one of the three auto industry CEOs who inflamed Congressional ire by flying to Washington in private jets to ask for taxpayers to bail out their beleaguered businesses. They returned a month later in hybrid cars.

more...

http://www.abcnews.go.com/Blotter/story?id=7208201&page=1

[ecstatic]

1. Not surprised. That's why I was wondering why people

were crying for him today. He's a millionaire! He's set! But millions of people are not, thanks to his management of GM.

[nonconformist]

15. Who was crying for him, exactly?

I've only seen people outraged by the hypocrisy of it all, the different standards to which these mega banks vs the US auto makers are held. I haven't seen anyone who actually felt sorry for Wagoner. Have a link?

[On the Road]

2. For the Head of One of the Largest Corporations in the World,

a lump sum of $20M is not unreasonable.

I don't know how it compares to lower management and hourly workers - at the very least, it's much less outrageous than the differential in yearly earnings.

[Horse with no Name]

3. It is obscene

Sorry. There is NO justification to reward someone for destroying a business. None whatsoever.

[Romulox]

11. LOL. What about the "sanctity of contract"? That was a good enough reason to pay the AIG bonuses.

[Merlot]

4. $20 is reasonable for a company that is in complete free fall

Even the company were profitable, $20 million is to much to pay one person while simultaneously cutting benefits and jobs of workers.

Also, these guys who get $20 million checks are already swimming in money. It's disgusting.

[On the Road]

5. This is a Retirement Plan

which by definition is not tied to job performance, but based on position and tenure.

At current interest rates, $20M translates into an annuity of about $1.4M a year.

http://www.totalreturnannuities.com/information/rates.html

A lot of the annual bonuses for financial firms were outrageous and a ripoff of the shareholders. GM, however, is a company which had over $200B in sales in '06. While it is a lot more than you or me, it is proportionate for the CEO of a corporation that size.

[Merlot]

16. How's that retirement plan working out for the rest of the workers?

[JDPriestly]

12. $20 M is obscene for a man who drove his company into a ditch

so deep that only Uncle Sam has strength to pull it out. That's a pretty big ditch. Wagoner took enough of GM's money in salaries -- exorbitant salaries over the years. $20M is far too much for him. How much does the average GM worker get in pension funds when he retires? I bet he is lucky to get $15,000 per year. If he works for GM from the age of 21 to the age of 65 and lives 30 years after retiring or to the age of 95, he probably gets $450,000 plus supplementary healthcare to Medicare -- which is not all that much since Medicare takes care of most healthcare costs for seniors.

[On the Road]

17. Performance is a Factor for Bonuses

and the top GM executives should not be getting performance bonuses. However, it is not, and should not be, a factor with pensions. If I do a bad job and get fired, the company does not have the right to revoke any retirement benefits that have already been accured.

On average, your boss makes 40% more than you. Because GM is so large, it has 17 levels of management. Under today's averages, the CEO of GM would make would make (1.4)¹⁷ more than an hourly worker.

A $20M retirement account for the CEO translates into a $170,000 account for an hourly worker. In terms of annuities, the CEO would have $1.4M/year versus $12,000 for an hourly worker. That is a proportional amount for the difference in position.

Personally, I think bosses should make less than 140% of their subordinates. Let's say it's 30% -- that translates into an annuity for an hourly worker of $25,400 per year. That's not an unreasonable gap -- it's caused by the sheer size of the organization.

Some of the performance bonuses that have been thrown around are indeed unjustified and obscene. They're simply ways of top management cashing in as much as they can get away with. The differences in pension is actually more moderate than the difference in salaries or bonuses.

[liberal N proud]

And labor gets screwed

[Fire1]

6. It's amazing that some folks thought he actually walked away with

NOTHING!!! LOL!!!

[TheCowsCameHome]

7. Fly to DC in a private jet to beg for $$$, get canned and skip away with 20mil.

That's the American business way.

He should be in prison for what he did.

[Xenotime]

8. and...the rich get richer.

[4_TN_TITANS]

9. And the theft continues...

right in front of very eyes.

[madrchsod]

10. thank god and greyhound he`s gone....

now maybe they can find someone who can promote the product line to the..wait a minute....people are jobless,cuts in hours/overtime , and afraid to spend.

they`ll have to the end of the year to make it- if they do`t they`ll fold up shop and sell off the company

[old mark]

13. Shit, that's more than I got......nt

[Raven]

14. I really fear that he'll be destitute...like the rest of us. n/t