Why is fired GM leader getting more money?
Is firing someone, but handing him $23 million as he walks out the door, really a punishment? That’s the question left in the wake of Rick Wagoner, the man who was the CEO of General Motors until he was given his walking papers by the Obama administration.
Everyone seemed to be celebrating the fact that finally one of those high-flying corporate CEOs was given the boot. After the Obama administration let those banking and AIG guys ride along with their outrageous and nonsensical bonuses, the feds finally did what needed to be done with GM.
But wait, what’s all this about a “pension payout”?
That’s right. Wagoner was handed a $23 million golden parachute just for screwing up the company and subsequently getting fired. (That’s the job to get – one that will pay you to be fired!)
According to published reports citing GM’s annual report, here is what Wagoner’s gift-for-failure will include:
· An accumulated pension of $22.1 million
· Stock awards worth $367,000
· Deferred compensation of $535,000
Deferred compensation? Why is this guy getting ANY compensation for being fired?
Of course, Wagoner’s supporters are rallying to his side, saying GM is legally bound to pay it out because it’s in his contract.
Wait a minute. This was the same argument the administration – in the form of Director of the White House National Economic Council Lawrence Summers – tried to make about those AIG “retention bonuses.” And a day later, President Obama did a 180 and said he would do everything possible to make sure taxpayer money wasn’t frittered away as supposed “bonuses” to corporate ne’er-do-wells.
At a time when workers are being told that they need to reconsider their contracts in order to save the companies they work for, these corporate bandits should be told the same, legal contracts be damned.
And if GM is getting all this federal bailout money, the now-fired former CEO shouldn’t be getting $23 million of company funds. He should get exactly what he deserved for leaving GM in ruins.
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ReplyDeleteI’ve been in the workforce for nearly 20 years and I can assure you that my pension funds are worth at most maybe $100K. Now Wagoner was with GM for more than 30 years so just maybe in 10 years I’ll see my pension increase in value by more than 230 times. Call me delusional maybe, but that just ain’t gonna happen. I work in the public sector and in this realm of underpaid professionals, if we screw up, we run the risk of a pension board denying us ever even seeing a dime of our pension. I think the private sector could take a cue from their counterparts and follow a similar practice. If running GM, once the largest corporation in the US, into the ground isn’t cause for denying someone his pension then nothing is.
ReplyDeleteAt the same time, Wagoner is the scapegoat for a systemic problem. The CEOs of the Big 3 are no less culpable than the corporate boards and the other levels of management who continued to push poorly designed and overpriced cars and trucks onto consumers. The unions bear some responsibility in this mess too; they insisted on more wages and benefits despite the fact that the writing was on the wall – they were assembling what wasn’t wanted and they didn’t care as long as they got higher wages at every contract renewal time. Indeed, there should be some major house cleaning done in all of these companies. If the domino effect wouldn’t be as devastating as it portends to be in the automotive world – the collapse and loss of jobs in the whole auto supply chain – these companies should be allowed to crash and burn. However, they’re too big to fail so clean house, send those ultimately responsible home penniless, and start anew. As we know from experience however, what will happen is that the companies will all shrink in size, management will depart w/ incredible golden parachutes and many hourly employees will lose their jobs and most if not all will have little or no pension awaiting them when they finally walk out the factory doors. Sad! Pathetic!